International credit rating agency Moody’s has withdrawn the credit ratings for Bank of Valletta (BOV), Business Today has learnt.
The announcement was made by Moody’s Investors’ Service in a statement issued on Monday.
Moody’s had been rating BOV since August 1997.
Moody’s explained that the decision to withdraw its credit rating was taken for “business reasons”.
The credit rating agency said that the decision to withdraw BOV’s rating was taken “with the consent of both parties” and did not reflect on the bank’s creditworthiness.
Asked by Business Today to elaborate more about the term “business reasons”, Elena Panayiotou, the analyst who took care of the BOV ratings, told this newspaper:
“Under certain circumstances, Moody’s will withdraw a rating for an issuer or an obligation for reasons unrelated to the adequacy of information, or bankruptcy or reorganization status of the credit.
“When this occurs, Moody’s will balance the market need for a rating against the resources required to maintain and monitor a rating,” the Moody’s analyst told Business Today.
In the same rating action, the rating agency had also lowered the bank’s senior unsecured debt to Baa1 from A3. The bank’s BFSR had been affirmed at D+.
BOV had consolidated total assets of €6.216 billion as at the end of September 2009.
The announcement came only a few days after BOV announced its financial results for Financial Year 2008-2009, which ended on 31 September 2009.
BOV made a profit after taxation of €60,149 million in the FY ending 31 September 2009 as against a profit of €26,283 million in the previous financial year.
BOV Group made a profit after taxation of €49,415 million as against a profit of 26,283 million in the previous financial year.
On 5 November 2008, Moody’s had lowered the bank’s long-term and short-term local and foreign currency ratings to Baa1/Prime 2 from A3/Prime 1.