In its annual Article IV Consultation, the International
Monetary Fund described in positive terms the Maltese banking
sector, defining it as 'resilient'. The Fund noted that
banks are well capitalized, profitable, and liquid. Solvency and
liquidity of core domestic banks and other peer banks remain above
the minimum regulatory requirements, and their profitability is
above the euro area average.
Positively, the Fund describes the increase in the coverage
ratio and the national authorities' consideration of using
further Pillar II measures to reduce non-performing loans as
welcome and appropriate, as are further increases in coverage
ratios as already envisaged. The completion of the ongoing work on
insolvency legislation, aiming to reduce court proceedings time and
enhance contract enforcement, should help improve NPL resolution,
adds the assessment.
