Fitch assigns BML a rating of ‘CCC-‘ with a stable outlook

Bank of Maldives (BML) has been assigned a Long-Term Issuer Default Rating (IDR) of 'CCC-' with a Stable Outlook by Fitch Ratings.

According to a statement released by the BML on Monday, Fitch has also assigned the bank a Local Currency Long-Term IDR of 'CCC+', which is two notches above the sovereign rating, reflecting the bank's strong standalone strength and resilience relative to the sovereign.

The ratings follow Fitch’s upgrade of the Maldives' Sovereign Long-Term Foreign Currency Issuer Default Rating to 'CCC-' on June 3, following the successful repayment of a USD 500 million sukuk in April, in addition to vital revenue-side reforms alongside the implementation of the Foreign Currency Act.

The BML states that as the sovereign rating acts as a ceiling for domestic financial institutions, bank's ratings remain constrained by the sovereign rating despite its strong intrinsic financial profile.

According to BML, Fitch’s assessment highlighted the bank’s leading franchise, strong market position and competitive advantages within the Maldivian banking sector.

As the country's largest bank, BML maintains a dominant presence across the nation through its extensive network, advanced digital banking platforms and support provided to individuals, businesses and large corporates throughout the country. BML states that its market leadership and scale provide a significant competitive advantage over local peers and underpin its strong and stable earnings generation.

Fitch also identified BML's robust capitalization as a key rating strength. According to Fitch, this reflects the bank's strong internal capital generation, prudent risk management and measured dividend policy, which have enabled the bank to maintain substantial capital buffers while continuing to support economic growth and customer financing needs.

Fitch further acknowledged the challenging operating environment in which Maldivian banks operate. The rating agency noted that persistent foreign currency shortages in the Maldives continue to place pressure on banking sector funding and liquidity, reflecting broader external imbalances within the economy.

Despite these structural challenges, BML's strong franchise, stable deposit base and prudent liquidity management have supported the bank's resilience through varying economic cycles. As the country's leading financial institution, BML plays a critical role in facilitating foreign currency flows, supporting economic activity and maintaining confidence in the financial system.

Fitch further noted that BML's business model reflects the structure of the Maldivian economy, with lending concentrated in tourism and other key domestic sectors. While such concentration is inherent in a small and relatively undiversified island economy, BML's expertise, longstanding customer relationships and prudent risk management practices support the bank's ability to manage these exposures effectively.

BML’s CEO and Managing Director Mohamed Shareef said the bank was pleased with the rating.

"We are pleased to publish our rating from Fitch Ratings, which recognizes the fundamental strength of Bank of Maldives, our market leadership, strong capitalization and resilient financial performance. The assessment underscores the strength of our bank and our ability to generate capital organically while maintaining prudent growth,” he said.

“Importantly, it also reflects our resilience in navigating the structural challenges inherent in a small island economy. As the largest and most systemically important financial institution in the Maldives, we remain committed to supporting our customers, contributing to national economic development and maintaining the highest standards of financial strength and governance."

According to BML, the Fitch ratings reflect the bank's strong standalone financial profile, market-leading position and robust capital base.

“The ratings also highlight the resilience of BML's business model and financial performance despite operating within a challenging macroeconomic environment. However, as with all domestic financial institutions, BML's credit ratings remain constrained by the sovereign rating framework, which currently caps the bank's rating despite its underlying financial strength,” said the bank.