Cassar White steps down as BOV head, urges bank to improve capital buffers

John Cassar White has officially stepped down as chairman of Bank of Valletta and has been replaced by Deo Scerri, formerly head of audit firm RSM.

In his final address to shareholders at the bank’s annual general meeting, Cassar White urged the bank to strengthen its capital buffers to ensure it is able to withstand stress and absorb any unexpected losses it may sustain in the course of its business.

Indeed, he warned that credit rating agency Fitch has recently downgraded BOV’s long-term credit rating from BBB+ to BBB.

“In order to regain its previous grading, the bank needs to take a three-pronged approach which includes measures to increase the capital buffers, improve asset quality and increase the effectiveness of its risk management,” he said.

Cassar White, who was appointed chairman of BOV in April 2013, toasted the bank’s performance throughout 2016.

“Our environment was characterised by a persistently low interest rate scenario, which translated into considerable pressure on the bank’s profitability,” he said. “On the other hand, the strong Maltese economy which continued to attract foreign direct investment both in services and manufacturing sectors yielded high investor and consumer confidence. These presented good opportunities for the bank to develop and supply solutions addressing the diverse financial needs of its customers.”

BOV chief executive Mario Mallia said that it in order to reinforce its capital buffers, the bank will follow a strategy comprising higher levels of profit retention and issues of capital instruments.

He said that BOV is changing its business model from one focused on growth to one that is quality-driven.

“In this regard, the bank is actively de-risking a number of business areas where the risk-return balance is unfavourable. Concurrently, the bank is cultivating alternative sources of revenue to supplement its profitability.”

During the AGM, the bank’s shareholders approved the proposed final gross dividend of €0.0852 per share. The board’s recommendation of a bonus issue of one share for every 13 shares held was also approved and as a result, the bank’s permanent capital will increase to €420 million.

As BOV’s shareholder, the government has the right to elect the bank’s chairperson as well as another director. It chose Deo Scerri, who was managing partner of RSM Malta, the audit firm of the Labour Party, as chairperson, and Anita Mangion as the second director.

Elsewhere, Antonio Piras was elected shareholder by UniCredit SPA – the second largest shareholder. The small shareholders elected Stephen Agius, Alan Attard, Paul Azzopardi, James Grech, Alfred Lupi, and Joseph Zrinzo on the board of directors.