A statement issued yesterday evening Bank of Valletta refers to reports featured in international and local media, namely Reuters and Times of Malta.
The statement states that Bank of Valletta would like to clarify that this relates to a confidential report which was based on the situation as it was a year ago.
Since then, BOV’s de-risking exercise has taken on a much wider dimension. The Bank is today engaged in a priority process – agreed with, and monitored by its regulators – to deal with the legacy issues highlighted by the report. The Bank made strong progress in addressing the specific issues within the relevant timelines, and is confident that its processes will be substantially enhanced as a result.
The Bank is currently undertaking a Transformation Programme, aimed at strengthening its IT systems and architecture, overall risk profile, internal controls framework, anti-financial crime defences and governance structure. The Transformation Programme includes a de-risking, or business restructuring and a remediation programme.
The de-risking, or business restructuring programme, aims at exiting or re-dimensioning business lines where the risk-return ratio is unfavourable, i.e. where the risk inherent in the business is not adequately compensated by the return. The Bank is currently exiting from a number of such businesses. Concurrently, it is scaling down its international corporate deposits business, as well as its international personal banking business. Core to this de-risking programme is the criterion that customers must have an economic nexus with Malta.
The upgrade of the Bank’s anti financial crime defences is being carried out in partnership with an international consultancy firm. In conjunction with the above, the Bank is conducting a complete review and remediation exercise on all its customer files.
Another objective of the programme is to strengthen and upgrade the internal control framework in line with best international practice.
The Bank’s dealings with regulators and customers are highly confidential, and so the Bank is unable to confirm or deny any of the specific assertions being made.