Bank of Valletta plc – Update to Interim Directors Statement

September 16, 2008

Bank of Valletta plc announced that in reference to the Company Announcement BOV158 issued on 1st August 2008, BOV commented on the results for the third quarter of the current financial year. The announcement noted that after a period of relative calm between mid March and mid June, the international capital markets had witnessed a renewed bout of volatility that had been predominantly experienced in the equity sector, with the fixed income markets being affected to a much lesser extent, particularly when compared with conditions earlier in the year. It was also noted that any additional markdowns that had been required to the date of the announcement had been comparatively modest. The Directors observed that, subject to this state of affairs continuing, and the volatility not spreading to the fixed income sector, the Board expected that the results for the second half of the current financial year would show a significant improvement over those reported for the first half.

The collapse of Lehman Brothers announced yesterday has triggered a fresh round of disruption in the wider global credit markets, resulting in greater volatility and the widening of credit spreads. Coming so close to Bank of Valletta plc’s financial year end (30th September), it is likely that these conditions will have a material adverse impact on the results for the last quarter of the current financial year.

The Bank’s portfolio includes a holding of Senior (non-subordinated) Lehman paper. Although it is too early to determine what recoveries will be made therefrom, it is believed that any ultimate loss that may arise from this holding will be modest in the context of the results of the Bank for the current financial year to date.

The results for the Bank of Valletta Group for the year ending on 30th September 2008 will be notified to the Malta Stock Exchange on 31st October 2008.

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