Bond Valletta Bank 3.75% ( MT0000021353 ) in EUR

Valletta Bank

100 % ⇌

Malta

MT0000021353 ( in EUR )

3.75% per year ( payment 1 time a year)

15/06/2031

Prospectus brochure of the bond Bank of Valletta MT0000021353 en EUR 3.75%, maturity 15/06/2031

100 EUR

50 000 000 EUR

15/06/2026 ( In 128 days )

Bank of Valletta plc is Malta's largest bank, offering a wide range of financial services including personal and business banking, investment services, and wealth management.

The Bond issued by Valletta Bank ( Malta ) , in EUR, with the ISIN code MT0000021353, pays a coupon of 3.75% per year.
The coupons are paid 1 time per year and the Bond maturity is 15/06/2031

Summary Note
dated 3 June 2019
This Summary Note is issued in accordance with the provisions of Chapter 4 of the Listing Rules published by the
Listing Authority and in accordance with the provisions of Commission Regulation (EC) No. 809/2004 of 29 April
2004 implementing Directive 2003/71/EC of the European Parliament and of the Council as regards information
contained in prospectuses as well as the format, incorporation by reference and publication of such prospectuses
and dissemination of advertisements, as amended.
In respect of an Issue of up to 50,000,000 3.75% Unsecured Subordinated Bonds 2026 - 2031
of a nominal value of 100 per Bond issued at par due 2031, subject to early redemption at the option
of the Issuer on any of the Early Redemption Dates by:
BANK OF VALLETTA P.L.C.
A PUBLIC LIMITED LIABILITY COMPANY REGISTERED UNDER THE LAWS OF MALTA
WITH COMPANY REGISTRATION NUMBER C 2833
ISIN: MT0000021353
THE LISTING AUTHORITY HAS AUTHORISED THE ADMISSIBILITY OF THE BONDS AS A LISTED FINANCIAL
INSTRUMENT. THIS MEANS THAT THE SAID INSTRUMENT IS IN COMPLIANCE WITH THE REQUIREMENTS
AND CONDITIONS SET OUT IN THE LISTING RULES. IN PROVIDING THIS AUTHORISATION, THE LISTING
AUTHORITY DOES NOT GIVE ANY CERTIFICATION REGARDING THE POTENTIAL RISKS IN INVESTING IN
THE SAID INSTRUMENT AND SUCH AUTHORISATION SHOULD NOT BE DEEMED, OR BE CONSTRUED AS, A
REPRESENTATION OR WARRANTY AS TO THE SAFETY OF INVESTING IN SUCH INSTRUMENT.
THE LISTING AUTHORITY ACCEPTS NO RESPONSIBILITY FOR THE CONTENTS OF THE PROSPECTUS, MAKES
NO REPRESENTATIONS AS TO ITS ACCURACY OR COMPLETENESS AND EXPRESSLY DISCLAIMS ANY
LIABILITY WHATSOEVER FOR ANY LOSS HOWSOEVER ARISING FROM, OR IN RELIANCE UPON, THE WHOLE
OR ANY PART OF THE CONTENTS OF THE PROSPECTUS INCLUDING ANY LOSSES INCURRED BY INVESTING
IN THE BONDS.
A PROSPECTIVE INVESTOR SHOULD ALWAYS SEEK INDEPENDENT FINANCIAL ADVICE BEFORE DECIDING TO INVEST
IN ANY LISTED FINANCIAL INSTRUMENT. A PROSPECTIVE INVESTOR SHOULD BE AWARE OF THE POTENTIAL RISKS
OF INVESTING IN THE BONDS AND SHOULD MAKE THE DECISION TO INVEST ONLY AFTER CAREFUL CONSIDERATION
AND CONSULTATION WITH HIS OR HER OWN INDEPENDENT FINANCIAL ADVISER.
THESE BONDS ARE COMPLEX FINANCIAL INSTRUMENTS AND MAY NOT BE SUITABLE FOR ALL TYPES OF
RETAIL INVESTORS. A PROSPECTIVE INVESTOR SHOULD NOT INVEST IN THE BONDS UNLESS: (A) HE/SHE HAS
THE NECESSARY KNOWLEDGE AND EXPERIENCE TO UNDERSTAND THE RISKS RELATING TO THIS TYPE OF
FINANCIAL INSTRUMENT; (B) THE BONDS MEET THE INVESTMENT OBJECTIVES OF THE POTENTIAL INVESTOR;
AND (C) THE PROSPECTIVE INVESTOR IS ABLE TO BEAR THE INVESTMENT AND FINANCIAL RISKS WHICH
RESULT FROM INVESTING IN THE BONDS.
Legal Counsel
Joint Sponsors
Manager & Registrar

IMPORTANT INFORMATION
THIS SUMMARY NOTE CONSTITUTES PART OF THE PROSPECTUS AND CONTAINS INFORMATION ON THE ISSUER AND
THE BONDS IN ACCORDANCE WITH THE REQUIREMENTS OF THE LISTING RULES, THE ACT AND THE PROSPECTUS
REGULATION.
NO BROKER, DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORISED BY THE ISSUER OR ITS DIRECTORS TO
ISSUE ANY ADVERTISEMENT OR TO GIVE ANY INFORMATION OR TO MAKE ANY REPRESENTATIONS IN CONNECTION
WITH THE SALE OF THE BONDS OTHER THAN THOSE CONTAINED IN THIS PROSPECTUS AND IN THE DOCUMENTS
REFERRED TO HEREIN, AND IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED
UPON AS HAVING BEEN AUTHORISED BY THE ISSUER, ITS DIRECTORS OR ADVISERS.
IT IS THE RESPONSIBILITY OF ANY PERSON IN POSSESSION OF THIS DOCUMENT AND ANY PERSON WISHING TO
APPLY FOR ANY BONDS TO INFORM THEMSELVES OF, AND TO OBSERVE AND COMPLY WITH, ALL APPLICABLE LAWS
AND REGULATIONS OF ANY RELEVANT JURISDICTION. PROSPECTIVE APPLICANTS FOR THE BONDS SHOULD INFORM
THEMSELVES AS TO THE LEGAL REQUIREMENTS OF APPLYING FOR ANY SUCH BONDS AND ANY APPLICABLE EXCHANGE
CONTROL REQUIREMENTS AND TAXES IN THE COUNTRY OF THEIR NATIONALITY, RESIDENCE OR DOMICILE.
A COPY OF THIS DOCUMENT HAS BEEN SUBMITTED TO THE LISTING AUTHORITY IN SATISFACTION OF THE LISTING
RULES, THE MALTA STOCK EXCHANGE IN SATISFACTION OF THE MALTA STOCK EXCHANGE BYE-LAWS AND HAS BEEN
DULY FILED WITH THE REGISTRAR OF COMPANIES, IN ACCORDANCE WITH THE ACT. APPLICATION HAS BEEN MADE
TO THE MALTA STOCK EXCHANGE FOR THE BONDS TO BE ADMITTED TO THE OFFICIAL LIST OF THE MALTA STOCK
EXCHANGE.
A PROSPECTIVE INVESTOR SHOULD BE AWARE OF THE POTENTIAL RISKS IN INVESTING IN THE ISSUER AND THE
BONDS AND SHOULD MAKE THE DECISION TO INVEST ONLY AFTER CAREFUL CONSIDERATION AND CONSULTATION
WITH HIS OR HER OWN INDEPENDENT FINANCIAL ADVISER.
STATEMENTS MADE IN THIS SUMMARY NOTE ARE, EXCEPT WHERE OTHERWISE STATED, BASED ON THE LAW AND
PRACTICE CURRENTLY IN FORCE IN MALTA AND ARE SUBJECT TO CHANGES THERETO.
THIS SUMMARY NOTE AND ALL AGREEMENTS, ACCEPTANCES AND CONTRACTS RESULTING THEREFROM SHALL BE
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF MALTA, AND ANY PERSON ACQUIRING ANY
BONDS PURSUANT TO THE PROSPECTUS SHALL SUBMIT TO THE JURISDICTION OF THE MALTESE COURTS, WITHOUT
LIMITING IN ANY MANNER THE RIGHT OF THE ISSUER TO BRING ANY ACTION, SUIT OR PROCEEDING, IN ANY OTHER
COMPETENT JURISDICTION, ARISING OUT OF OR IN CONNECTION WITH ANY PURCHASE OF BONDS, OR AGREEMENT,
ACCEPTANCE OR CONTRACT RESULTING HEREFROM OR FROM THE PROSPECTUS AS A WHOLE.
ALL THE ADVISERS TO THE ISSUER HAVE ACTED AND ARE ACTING EXCLUSIVELY FOR THE BANK IN RELATION TO
THIS PROSPECTUS AND HAVE NO CONTRACTUAL, FIDUCIARY OR OTHER OBLIGATION OR RESPONSIBILITY TOWARDS
INVESTORS IN RELATION TO THE PROSPECTUS. NONE OF THE ADVISERS ACCEPT ANY RESPONSIBILITY TO ANY INVESTOR
OR ANY OTHER PERSON WHOMSOEVER IN RELATION TO THE CONTENTS OF AND ANY INFORMATION CONTAINED IN THE
PROSPECTUS, ITS COMPLETENESS OR ACCURACY OR ANY OTHER STATEMENT MADE IN CONNECTION THEREWITH.
THE CONTENTS OF THE ISSUER'S WEBSITE OR ANY WEBSITE DIRECTLY OR INDIRECTLY LINKED TO THE ISSUER'S
WEBSITE DO NOT FORM PART OF THIS PROSPECTUS. ACCORDINGLY, NO RELIANCE OUGHT TO BE MADE BY ANY
INVESTOR ON ANY INFORMATION OR OTHER DATA CONTAINED IN SUCH WEBSITE AS THE BASIS FOR A DECISION TO
INVEST IN THE BONDS.
THE DIRECTORS CONFIRM THAT WHERE INFORMATION INCLUDED IN THIS PROSPECTUS HAS BEEN SOURCED FROM
A THIRD PARTY, SUCH INFORMATION HAS BEEN ACCURATELY REPRODUCED, AND AS FAR AS THE DIRECTORS ARE
AWARE AND ARE ABLE TO ASCERTAIN FROM INFORMATION PUBLISHED BY THAT THIRD PARTY, NO FACTS HAVE BEEN
OMITTED WHICH WOULD RENDER THE REPRODUCED INFORMATION INACCURATE OR MISLEADING.
THE VALUE OF INVESTMENTS CAN GO UP OR DOWN AND PAST PERFORMANCE IS NOT NECESSARILY INDICATIVE
OF FUTURE PERFORMANCE. PROSPECTIVE INVESTORS SHOULD CAREFULLY CONSIDER ALL THE INFORMATION
CONTAINED IN THE PROSPECTUS AS A WHOLE AND SHOULD CONSULT THEIR OWN INDEPENDENT FINANCIAL AND
OTHER PROFESSIONAL ADVISERS PRIOR TO INVESTING.
4

This Summary Note has been prepared in accordance with the requirements of the Regulation.
A summary note is made up of disclosure requirements known as `Elements'. These Elements are numbered in
Sections A E (A.1 E.7). This Summary Note contains all the Elements required to be included in a summary
for this type of security and Issuer. Because some Elements are not required to be addressed, there may be
gaps in the numbering sequence of the Elements. Even though an Element may be required to be inserted in
the summary because of the type of security and issuer, it is possible that no relevant information can be given
regarding the Element. In this case a short description of the Element is included in the summary with the mention
of `not applicable'.

Except where the context otherwise requires, the capitalised words and expressions used in this Summary Note shall
bear the meanings assigned to them in the Registration Document and the Securities Note, as the case may be.
SECTION A INTRODUCTION AND WARNINGS
_____
A.1
Prospective investors are hereby warned that:
i. this Summary Note is being provided to convey the essential characteristics and risks associated
with the Issuer and the Bonds. This document is merely a summary and therefore should only be read
as an introduction to the Prospectus. It is not and does not purport to be exhaustive and investors
are warned that they should not rely on the information contained in this Summary Note in making a
decision as to whether to invest in the Bonds. Any decision to invest in the Bonds should be based on
a consideration of the Prospectus as a whole by the investor;
ii. where a claim relating to the information contained in the Prospectus is brought before a court, the
plaintiff investor might, under the national legislation of Malta, have to bear the costs of translating the
Prospectus before the legal proceedings are initiated; and
iii. civil liability attaches only to those persons who have tabled the summary, but only if the summary,
when read together with the other parts of the Prospectus is misleading, inaccurate or inconsistent or
does not provide key information in order to aid investors when considering whether to invest in such
securities.
A.2
Consent required in connection with the use of the Prospectus for subsequent resale or final placement
by financial intermediaries: Not Applicable. There will be no subsequent resale or final placement of the
Bonds and accordingly no such consent is required.
SECTION B ISSUER
_____
B.1
The legal name of the Issuer is Bank of Valletta p.l.c. and the commercial name of the Issuer is BOV.
B.2
The Issuer was registered in Malta in terms of the Act on 21 March 1974 as a public limited liability
company. The Issuer is domiciled in Malta.
B.4b
The following is an overview of the most significant recent trends affecting the Issuer and the markets in
which the Group operates:

Global and Local Economic Outlook

The economic deterioration experienced in the fourth quarter of 2018 in major economies has spilled into the
first quarter of 2019. Although idiosyncratic factors (new fuel emission standards in Germany, natural disasters
in Japan) weighed on activity in large economies, these developments occurred against a backdrop of
weakening financial market sentiment, trade policy uncertainty and tariff hikes, a deterioration in manufacturing
confidence, and concerns about China's outlook. Although robust labour markets and resilient domestic
demand have partially offset this weakness, the IMF1 is anticipating global growth to decline to 3.3% in 2019
before picking up slightly to 3.6% in 2020. This pick up is mainly supported by growth in China and India and
stabilisation in a few big emerging market economies such as Argentina and Turkey.
1 International Monetary Fund, `Global Prospects and Policies', (April 2019)
<www.imf.org/en/Publications/WEO/Issues/2019/03/28/world-economic-outlook-april-2019>
Bank of Valletta p.l.c. | Summary Note
5

This growth pattern reflects a persistent decline in the growth rate of advanced economies from above-trend
levels occurring more rapidly than previously anticipated, together with a temporary decline in the growth
rate for emerging market and developing economies in 2019. Specifically, growth in advanced economies is
projected to slow down from an estimated 2.3% in 2018 to 2.0% in 2019 and 1.7% in 2020. This is coupled
with a very benign inflationary scenario, leading to a dovish shift by the major central banks.

Growth in the Euro area is set to moderate from 1.8% in 2018 to 1.3% in 2019 and 1.5% in 2020. Growth
rates have been marked down for many economies, notably Germany, Italy and France. The ECB has also
confirmed that monetary policy will remain accommodative and any upward interest rate revisions will only
be reviewed well into 2020. On the other hand, potential US tariffs on EU imports and a hard Brexit can
significantly exacerbate the weak economic scenario.

There is substantial uncertainty around the unchanged baseline projection of about 1.5% growth in
the United Kingdom in 2019-20, offsetting the negative effect of prolonged uncertainty surrounding
the outcome of Brexit and the positive impact from fiscal stimulus announced in the 2019 budget. This
baseline projection assumes that a Brexit deal is reached in 2019 and that the UK transitions gradually
to the new regime. However, fundamental uncertainties relating to future investment and export market
access can have a negative impact on growth.

The Maltese economy continued with its strong performance, providing a supportive environment for
business activity. Local economic growth continued apace, with Malta's gross domestic product (GDP)
growing by 6.9% in 2018 in real terms (2017: 6.7%), with the strongest growth driver being consumption
expenditure. The Labour Force Survey for the third quarter of 2018 estimated an unemployment rate of
3.7%, down from 4.0% for the same quarter in 2017. During the same period an increase in both the
labour force and activity rate was noted. The Central Bank of Malta is anticipating an increase in total
employment of 3.3% and an unemployment rate of 3.8% for 2019. Total employment is expected to
increase by a further 3.0% in 2020 and the unemployment rate is expected to stand at 3.9%.

Capital overview

The Group's main strategic objective is to safeguard the long-term stability and sustainability of the
Bank through the strengthening of its capital. The chief source of ongoing capital accretion by the Issuer
is profit retention.

Another important objective for the Group is that of managing its capital in an integrated way by seeking
to fulfil regulatory requirements, ensure solvency, and maximise profit. In this way, the Group is able
to achieve long-term sustainability, identify growth opportunities that provide a sustainable risk-return
performance, while aiming to ensure a sufficient level of capitalisation to absorb unexpected losses.

The Group has a comfortable solvency position which exceeds the minimum requirements of the ECB
and other regulations. The Group's CET1 ratio was reported at 18.3% as at end 2018. This improvement
in its capital position enabled the Bank to comply with increased regulatory capital requirements and to
implement its strategic initiatives.

In November 2014, the Issuer became a systemically important bank falling under the direct supervision of the
Joint Supervisory Team made up of representatives from the ECB as well as from the Malta Financial Services
Authority. This has had a substantial impact on the Bank, its conduct, operations and its capital base.

Capital instruments

The Group's capital base is composed of CET1, being the primary component of the Group's capital base,
and Tier 2 Capital, as defined in Part Two of the CRR. The Group is continuously focused towards further
strengthening its CET1 capital which is the highest form of quality capital, thus providing the greatest level
of protection against losses.

Recent and forthcoming capital issuances

In line with the Bank's main strategic objective stated above, the issued share capital of the Bank was increased
by a nominal amount of 105 million ordinary shares (following a rights issue completed in FY 2017).
6

In furtherance of its strategic objective, the Bank will be issuing a subordinated bond as set out in terms
of this Prospectus, which bond will replace the one maturing in June 2019 and the proceeds of which will
constitute Tier 2 Capital of the Bank.

During the second half of 2019, the Bank also intends to issue an additional tier contingent instrument,
commonly referred to as AT1 bond to the tune of 150 million and which will be targeted to institutional
investors. This instrument will carry a significant loss absorption capacity and will qualify as additional Tier
1 capital leading to a substantial increase in the Bank's Tier 1 capital ratio.

These capital issues will ensure that the Bank is prepared and compliant with the EBA proposed SREP
guidelines which were issued in 2018. It will also place the Bank in a strong position to meet the additional
regulatory measures for stronger provisioning methodologies that will become effective in the coming years.

Distribution of dividends

Being constantly faced with a number of challenges ranging from intensifying competition, legacy litigation
cases, the need for more advanced anti-financial crime and anti-money laundering measures, extreme low
level of interest rates and new regulations requiring further IT development and the training of staff, have led
the Board to decide, in consultation with the supervisory authorities, against the distribution of cash dividends
for FY 2018. The Board thus gave priority to the long-term stability of the Bank over the short-term return, in
furtherance of the Bank's main strategic objective. The Board intends to resume dividend payments in line with
its dividend policy as soon as prudent judgement so permits and with guidance from its supervisors.

Strategic initiatives of the Bank

The Board has articulated clear corporate long-term goals for the Bank and has set strategic initiatives for
the years 2018 to 2020. These goals are as follows:
1) Financial stability and sustainability;
2) Protection of the interests of depositors; and
3) Provision of a sustainable and equitable return to shareholders.

The Board has further identified a number of corporate strategies, which define the ways in which the
Bank plans to achieve its corporate goals. The principal strategies are:

· Digitalisation

The Bank has stepped up its digitalisation strategy with the aim of facilitating the electronic distribution
of products and services through different channels. The objective is to transform the Bank into the most
accessible financial services provider on the local market in the digital age. In 2018, the Bank launched an
improved version of its internet banking platform.

· Core Banking Transformation

The Core Banking Transformation Programme, which the Bank expects to implement towards the end of
this year, comprises the change of the core IT system and the re-engineering of associated processes.
The scope of the original programme was widened to embrace further IT and process changes, and has
now been structured as a holistic transformation programme aimed at improving customer service.

· Long-term financial stability

As stated above, the Issuer is a local systemically important institution, and is consequently required to
hold capital buffers which are higher than those which would be required of less significant banks. The
further strengthening by the Bank of its capital is, in fact, to build up the necessary capital buffers, not
only with the aim of compliance with supervisory demands, but also to ensure the long-term viability of the
Issuer as a stable institution with sufficient capital to absorb any future unexpected losses. Regulations in
respect of these additional buffers entered into force as from January 2016, with full application as from
January 2019.

· Governance and regulation

The Bank continues to improve its governance framework, including changes to its Memorandum and
Articles, with the aim of enhancing Board effectiveness and continuity and also to ensure the right balance
of skills and experience within the Board at an individual and on a collective basis.
Bank of Valletta p.l.c. | Summary Note
7

Regulation is a constantly evolving field to which the Bank allocates significant resources, major amongst
which is the strengthening of its anti-money laundering and countering of financing of terrorism defences.

· Revision of the business model

The Group has continued with the restructuring of its business model, with the objective of lowering its risk
profile through a de-risking programme. The de-risking programme includes: (i) the winding down of certain
business lines, namely the trusts and custody businesses; (ii) the re-dimensioning of other business lines
notably the termination of thousands of customer relationships within the Bank's International Corporate
Centre which no longer fit within the Bank's risk appetite; (iii) the revision of the Bank's risk appetite
framework; (iv) the enhancement of risk policies such as the revision of the customer acceptance policy;
and (v) comprehensive training programmes covering the entire organisation from the Board of Directors
downwards.

· Resourcing

Human resources ("HR") and information technology are the two principal resources available to the Bank
in carrying out its operations. It is therefore inevitable that the Bank should give prime consideration to
these two areas.

The main IT initiative currently being undertaken by the Bank is the Core Banking Transformation
Programme referred to above.

With respect to human resources, the Issuer's HR strategy includes:
· A new training philosophy, supported by the opening of new state-of-the-art training facilities;
· A focus on ethics, which is backed by a revised and updated code of ethics and a conflict of interest
policy; and
· The setting up of an HR steering committee to oversee roll-out of the remaining strategic initiatives.

Litigation provisioning

The Bank is currently involved in a number of litigation cases. Management remains convinced, on the
basis of counsel's advice, that the Bank's legal position in these cases is strong. Nevertheless, the Board
has deemed it prudent to set aside the amount of 75 million as a provision against potential losses from
litigation and claims. This is a judgement call based on the situation prevailing as at December 2018,
and is subject to ongoing review in the light of developments. As a result of these legacy legal issues,
the Board, following extensive discussion with its banking supervisors (as described above), decided to
suspend cash dividends for 2018.

Improving cyber resilience

On 13 February of this year, the Issuer suffered a very sophisticated cyber-attack which resulted in 11
fraudulent payment transactions totalling an equivalent of 12.9 million. The Bank's business continuity
plans were immediately set into action with a number of its services resuming after a few hours. In fact,
operations throughout the Bank's branch network, ATMs and internet banking channel (including SEPA
payments) were fully operational the following day, with the exception of payments to third parties outside
the Euro area.

Nevertheless, the Bank has already commenced modernising and enhancing its security infrastructure
with a view to strengthening its cyber-security programme thereby building a stronger cyber-resilient
ecosystem to stay ahead of threat actors.

The strengthening of its cyber-security programme includes a commitment by the Board to enhance
its oversight with the establishment of an information technology oversight committee to be chaired by
an independent non-executive director. Said committee will assist the Board in fulfilling its oversight
responsibilities in relation to the digital ecosystem including cyber-security, the Core Banking Transformation
Programme, and innovative technologies including FinTech and RegTech.
8

Regulatory framework

Recent and future changes in the laws and regulations applicable to credit institutions may have a
significant impact on the Bank. Measures that were recently adopted or which are (or whose application
measures are) in the process of being adopted, have had or are likely to have an impact on the Bank,
principally amongst which are the following:
-
The Capital Requirements Directive IV ("CRD IV")/the Capital Requirements Regulation ("CRR") and the
Bank's designation as a systemically important bank by the Financial Stability Board. Three years on from
the CRD IV/CRR being finalised, the EU's banking sector now faces a revised CRD and CRR package
("CRD V and CRR II") and a host of other legislative amendments including amendments to the BRRD, and
a new international standard for total-loss absorbing capacity ("TLAC");
-
On 24 November 2015, the European Commission proposed a regulation to establish a European
Deposit Insurance Scheme ("EDIS") for deposits of all credit institutions which are members of any of
the current national statutory depositor compensation schemes of EU Member States participating in
the Banking Union;
-
The new Markets in Financial Instruments Directive ("MiFID II") and Markets in Financial Instruments
Regulation ("MiFIR"), which became effective as of January 2018, and which were enacted with the aim
of restoring confidence in the industry after the financial crisis imposed more reporting requirements and
tests to increase transparency and improve investor protection;
-
The GDPR became effective on 25 May 2018, moving the European data confidentiality environment
forward and improving personal data protection within the European Union. Non-compliance with the
standards set by the GDPR may result in severe penalties. The GDPR applies to all banks providing
services to European citizens;
-
The second Payment Services Directive ("PSD 2") updates and enhances the EU rules put in place by
the first Payment Services Directive. The PSD 2 entered into force in January 2016 with transposition
happening by 13 January 2018. The major change brought about by the PSD 2 is the opening up by the
payments industry through the "account information service" rule and the "payment initiation service"
rule which oblige banks to provide third party payment service providers access to customer account
information subject to customer approval;
-
The ongoing stringent requirements required by the EU and local anti-money-laundering and the countering
of terrorist financing regulatory framework requiring credit institutions to have ever increasing anti-financial
crime and anti-money laundering systems and controls;
-
The adoption by the Maltese tax authorities of Foreign Account Tax Compliance Act ("FATCA") and
Common Reporting Standard ("CRS") under the Cooperation with other Jurisdictions on Tax Matters
Regulations whereby Maltese credit institutions including the Issuer, became obliged to collect or review
information on all their clients and, where required, to report same to the local tax authorities;
-
The adoption by the Group of IFRS 9 on 1 January 2018 which resulted in changes in accounting policies
relating to the classification and measurement and impairment of financial assets.

B.5
The Issuer is the parent company of the Group and is the sole direct shareholder of the Subsidiaries. The
organisational chart for the companies forming part of the Group as at the date of the Prospectus is as set
out below:
The Issuer
C 2833
BOV Asset Management Limited
BOV Fund Services Limited
(100%)
(100%)
C 18603
C 39623
B.9
Not Applicable: no profit forecasts or estimates have been included in the Prospectus.
Bank of Valletta p.l.c. | Summary Note
9

B.10
Not Applicable: the audit reports on the Issuer's consolidated audited financial statements for the financial
years ended 31 December 2017 and 31 December 2018 do not contain any qualification.
B.12
The following table depicts key financial information extracted from the audited consolidated annual
financial statements of the Issuer for the financial years ended 31 December 2017 and 31 December 2018.
The Issuer's audited consolidated annual financial statements are incorporated by reference in, and form
part of, the Prospectus.
As at 31 Dec 2018
As at 31 Dec 2017
Authorised share capital (ordinary shares of 1.00 each) (`000)
1,000,000
1,000,000
Ordinary shares in issue of 1.00 each (`000)
530,772
525,000
Total assets ('000)
12,146,988
11,820,630
Total liabilities ('000)
11,152,855
10,858,543
Total equity ('000)
994,133
962,087
CET1 ratio
18.3%
16.1%
Total Capital Ratio
21.1%
19.4%
There has been no material adverse change in the prospects of the Issuer since the date of its last published
audited consolidated annual financial statements.
There were no significant changes in the financial position of the Issuer since the date of its last published
audited consolidated annual financial statements.
B.13
Not Applicable: The Issuer is not aware of any recent events which are to a material extent relevant to the
evaluation of its solvency.
B.14
Not Applicable: The Issuer is the parent company of the Group and is the sole direct shareholder of the
Subsidiaries. The financial position of the Issuer is not dependent on the financial position of other entities
within the Group.
B.15
The Issuer is a commercial bank, operating, together with its Subsidiaries, predominantly in Malta. The
Group offers banking, financial and investment services and connected activities within the domestic
Maltese market. The principal activities of the Group comprise the following:
i. The receipt and acceptance of customers' monies for deposit in current, savings and term accounts
which may be denominated in Euro and other major currencies (deposit taking activities);
ii. The provision of finance through loans and advances, trade finance facilities and other credit products
to customers; and
iii. The provision of investment services including stockbroking, advisory and discretionary portfolio
management services.

The Issuer, together with its Subsidiaries, also provides a number of other services including: (i) bancassurance;
(ii) corporate advisory; (iii) fund management and discretionary management; and (iv) fund administration.
B.16
To the extent known by the Issuer, direct or indirect control of the Issuer is not vested in any one single
entity or person. As at the date of the Prospectus, the Issuer is not aware of any arrangements, the
operation of which may, at a subsequent date, result in a change of control of the Issuer.

The following shareholders hold in excess of 5% of the share capital of the Issuer having voting rights:

Government of Malta

25.0 %

UniCredit S.p.A.

10.2 %
10

B.17
The Issuer is currently rated by Standard and Poor's ("S&P") & Fitch Ratings ("Fitch"). S&P and Fitch are
two of the three big credit rating agencies and have been designated as nationally recognised statistical
rating organisations (NRSRO) by the U.S. Securities & Exchange Commission.

The Issuer's long-term issuer default rating assigned by S&P is `BBB' while the short-term rating is `A-2'
with a negative outlook. The Issuer's long-term issuer default rating as assigned by Fitch is `BBB' whilst
the short term rating is `F2' with a stable outlook.
SECTION C SECURITIES
_____
C.1
The Issuer shall issue up to 50,000,000 unsecured subordinated Bonds having a nominal value of 100
per Bond, subject to a minimum holding of 25,000 in Bonds. The Bonds will be issued in fully registered
and dematerialised form and will be represented in uncertificated form by the appropriate entry in the
electronic register maintained on behalf of the Issuer at the CSD. On admission to trading, the Bonds will
have the following ISIN: MT0000021353. The Bonds shall bear interest at the rate of 3.75% per annum
and shall be repayable in full on maturity on 15 June 2031 unless previously re-purchased and cancelled,
provided that the Issuer reserves the right to redeem all the Bonds on any of the Early Redemption Dates
at their nominal value as the Issuer may determine by giving not less than 60 days' notice in writing to
Bondholders.
C.2
The Bonds are denominated in Euro ().
C.5
The Bonds are freely transferable and, once admitted to the Official List, shall be transferable only in whole
in accordance with the rules and regulations of the MSE applicable from time to time.
C.8
There are no special rights attached to the Bonds other than the right of the Bondholders to the repayment
of capital and the payment of interest and in accordance with the below described ranking.

Ranking: The Bonds are debt obligations of the Issuer and constitute the Issuer's general, direct,
unconditional, subordinated and unsecured obligations and shall at all times rank pari passu, without any
priority or preference among themselves and with other subordinated obligations of the Issuer. Thus, the
Bonds rank after other outstanding, unsubordinated and unsecured obligations of the Issuer.
C.9
The Bonds shall bear interest from and including 5 July 2019 (or such earlier date as may be determined
by the Issuer in the event that the Offer Period closes earlier in case of over-subscription by Preferred
Applicants) or 17 July 2019 (should the Intermediaries' Offer takes place) (the "Interest Commencement
Date") at the rate of 3.75% per annum on the nominal value thereof, payable semi-annually in arrears on
each Interest Payment Date. The first interest payment will be effected on 15 December 2019 on a pro
rata basis, covering the period from the Interest Commencement Date to 14 December 2019, both days
included. Any Interest Payment Date which falls on a day other than a Business Day will be carried over to
the next following day that is a Business Day. The gross yield calculated on the basis of the interest, the
Bond Issue Price and the Redemption Value of the Bonds at Redemption Date is 3.75%.

The remaining component of Element C.9 is Not Applicable, given that no representative of debt security
holders has been appointed.
C.10
Not Applicable: there is no derivative component in the interest payments on the Bonds.
C.11
The Listing Authority has authorised the Bonds as admissible to listing pursuant to the Listing Rules by
virtue of a letter dated 3 June 2019. Application has been made to the MSE for the Bonds being issued
pursuant to the Prospectus to be listed and traded on the Official List. The Bonds are expected to be
admitted to the MSE with effect from 12 July 2019 and trading is expected to commence on 15 July 2019
(however these dates may: i) be brought forward in the event that the Offer Period closes earlier in case of
over-subscription by Preferred Applicants; or ii) be deferred to 24 July 2019 and 25 July 2019 respectively
should the Intermediaries' Offer take place).
Bank of Valletta p.l.c. | Summary Note
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SECTION D RISKS
_____

Holding of Bonds involves certain risks. Prospective investors should carefully consider, with their own
independent financial and other professional advisers, the following risk factors and other investment
considerations, as well as all the other information contained in the Prospectus, before deciding to acquire
Bonds. Prospective investors are warned that by investing in the Bonds they may be exposing themselves
to significant risks that may result in them losing a substantial part or all of their investment.

This document contains statements that are, or may be deemed to be, "forward-looking statements", which
relate to matters that are not historical facts and which may involve projections of future circumstances. They
appear in a number of places throughout the Prospectus and include statements regarding the intentions,
beliefs or current expectations of the Issuer and/or its Directors. These forward-looking statements are
subject to a number of risks, uncertainties and assumptions and important factors that could cause actual
risks to differ materially from the expectations of the Issuer's Directors. No assurance is given that the future
results or expectations will be achieved.

Prospective investors are advised to read the Prospectus in its entirety and, in particular, the sections
entitled "Risk Factors" in the Registration Document and Securities Note, for an assessment of the factors
that could affect the Issuer's future performance.

The risk factors set out below are a summary of the principal risks associated with an investment in the
Issuer and the Bonds there may be other risks which are not mentioned in this Summary Note.
D.2
Key information on the key risks specific to the Issuer:

The Issuer is engaged in the business of banking and other financial services. The following are the key
risks that may arise in the normal course of business, which risks may affect the Issuer's ability to fulfil its
obligations under the Bonds:
i.
Credit Risk: This risk relates to the possibility of the Issuer's contractual counterparties not fulfilling
their payment obligations with the Issuer.
ii.
Liquidity Risk: This risk refers to the possibility that the Issuer may find itself unable to meet its
current and/or future, anticipated and/or unforeseen cash payments and delivery obligations without
impairing its day-to-day operations or financial position. The activity of the Issuer is subject, in
particular, to funding liquidity risk, market liquidity risk, mismatch risk and contingency risk.
iii.
Concentration Risk: This risk arises due to a high level of exposure by the Bank to: (i) individual
issuers or counterparties (single name concentration); (ii) a group of connected clients; (iii) industry
sectors and geographical regions (sectoral concentration); (iv) a single currency; and/or (v) credit
exposures secured by a single security. Due to concentration risk, the associated credit risks could
be significantly greater than those where no such high levels of exposure or connections exist. Given
the size and nature of the domestic financial sector and the local economy, the Bank is exposed to
concentration risk in its credit business.
iv.
Interest Rate Risk: Fluctuations in interest rates may affect the Issuer's net interest margin, but
may also impact its results and profitability. Furthermore, the persistence of exceptionally low and
negative interest rates for a further prolonged period may have an adverse impact on the Issuer's
financial performance and condition.
v.
Operational Risk: This refers to the risk of loss due to errors, infringements, interruptions and damages
caused by failures or inadequacies in internal processes, personnel, systems, or due to external events.
vi.
Information Technology Risk: This refers to the risk of the occurrence of a partial or complete failure
of any of the Bank's information technology systems or communication networks, which may have a
detrimental effect on the Issuer's business and its ability to compete effectively.
vii.
Cyber-security Risk: This relates to the risk of cyber-attacks, data theft or other unauthorised
use of data, error, bugs, malfunctions, inadequate maintenance service levels, or other malicious
interference with or disruptions to the Group's operating systems, including its I.T. systems and other
technological arrangements.
viii.
Systemic Risk: This refers to the risk that a default of any one institution could lead to defaults by
other institutions. Concerns about, or a default by, or a governmental "bail out" of, or "bail in" of,
one institution could lead to significant liquidity problems, including increases in the cost of liquidity,
12