BOV to issue quarterly announcements on credit portfolio base rates

Bank of Valletta said Tuesday that it is initiating a process of issuing quarterly Company Announcements to keep the market informed in respect of its decisions regarding the setting of its base rates. This is being done to provide the market with transparent and timely information on the Bank’s review in relation to these benchmarks, the bank said in a statement.

The commencement of this series of announcements reflects improvements in the technical and governance systems and structures being used by the Bank for the determination of base rates. It also highlights the Bank’s continued commitment to improve and strengthen its communications with the financial markets, and to meet and exceed regulatory expectations.

The Bank Base Rates operate as a core component within the Bank’s enterprise‑wide pricing framework. It works in tandem with product‑specific parameters (such as risk‑based add‑ons, customer‑level adjustments, and contractual terms) to deliver pricing outcomes that are fair, transparent, and consistent with the principles laid out in the Bank’s internal pricing governance.

By anchoring lending rates to an internally governed benchmark, the Bank promotes coherence between individual credit decisions and broader balance sheet objectives, including profitability, capital efficiency, and portfolio risk appetite. These internal benchmark rates are subject to a structured governance and review process every quarter, the bank said.

In determining the Base Rate levels for the forthcoming period, the Bank undertook a comprehensive assessment grounded in its formal Base Rate Policy. This framework requires that every decision, whether to maintain or amend the rates, be evaluated holistically across key principles that safeguard financial resilience, prudent balance sheet management, and fair outcomes for customers.

Following this scheduled review of interest rate trends and prevailing market conditions, the Bank’s Base Rates applicable to its Credit Portfolio will remain unchanged for the forthcoming three‑month period up to end June 2026. Effectively, the Business Bank Base Rate remains at 2.15% per annum, the Home Loans Bank Base Rate remains at 2.15% per annum and the Personal Loans Bank Base Rate remains at 2.45% per annum.

The decision to retain the Base Rates for its credit portfolio unchanged for the forthcoming three‑month period is underpinned by internal financial projections which continue to indicate consistency with its strategic, budget and risk appetite, Key Performance Indicators and Key Risk Indicators. The capital and liquidity positions of the Bank remain strong without any indications of stresses.

Current geopolitical tensions abroad, the outlook for the economy, the Bank’s competitiveness in the market, and the safeguarding of the interests of the Bank’s clients also vouch for the need for continued stability in interest rates in Malta and in the Bank’s base rates in particular. The Bank also noted that, over recent years, it was able to maintain the Base Rates at stable levels notwithstanding changes in market conditions, including shifts in the European Central Bank’s monetary policy stance.

These rates will remain in effect, at least, until the next review scheduled for June 2026, the bank said.