BOV ‘Clarifies’ Claim That It Failed To Properly Manage Risks In Thousands Of Payments Since 2015
Bank Of Valletta has released a statement to “clarifying” a report from the European Central Bank that said that the Maltese bank had failed to detect or address risks involving thousands of payments for a number of years.
The Frankfurt-based regulator said that BOV had failed to deal with a litany of risk management shortcomings, despite having warned BOV from as far back as 2015.
However, BOV responded to this report, saying it was outdated.
“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” going on to say that, since then, the bank’s de-risking exercises have been upgraded.
“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,” he continued.
“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 said programme includes a restructure of the business and remediation programmed, aimed at re-dimensioning the lines of business where a risk-return ration is unfavourable.
Meaning if the risk is inherent to a business but not adequately compensated through a return, the bank would rethink how it moves forward.
“The Bank is currently exiting from a number of such businesses,” Azzopardi also mentions, “concurrently, it is scaling down its international corporate deposits business, as well as its international personal banking business.”
BOV is also upgrading its anti-financial crime defences in partnership with an international consultancy firm. In conjunction with this, BOV will conduct a complete review of all customer files.
The internal framework will also be upgraded in line with best international practice, while regulators and customers are highly confidential the Bank is unable to confirm or deny any of the specific assertions being made.
You can find BOV’s full statement below.
Bank of Valletta refers to reports featured this evening in international and local media, namely Reuters and Times of Malta. 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.