Bank of Valletta to sell part of its non-performing loan portfolio

Bank of Valletta is in “advanced talks” to sell part of its portfolio of long-standing non-performing loans, the company said on Wednesday.

The bank did not quantify the portion of non-performing loan portfolio it was selling or what percentage it represents. Neither did it give details as to the potential buyers.

BOV’s annual report for 2022 put the group’s non-performing portfolio at €204 million of which €93 million were forborne.

Non-performing exposures constituted 3.5% of the bank’s total loan portfolio, which stood at a staggering €5.6 billion.

In its statement on Wednesday the bank said the sale of part of its non-performing loans was intended to “strengthen its capital and liquidity buffers”.

“In selecting the Portfolio of non-performing loans, the Bank has followed a rigorous process using predefined criteria,” BOV said.

It added the portfolio being put up for sale does not include loans where the underlying borrowers defaulted on their obligations for health-related reasons.

BOV said that the portfolio in question contains loans, which over several years, the bank took steps to recover the outstanding amounts owed and clients defaulted on their obligations and agreed terms on multiple occasions.

The bank said it will keep the market informed of any developments as they arise and will consequently publish further details in due course.