Fitch Assigns BML ‘CCC-’ Rating with Stable Outlook

Bank of Maldives (BML) has received a Long-Term Issuer Default Rating (IDR) of ‘CCC-‘ with a Stable Outlook from Fitch Ratings, with the bank saying the assessment underscores its financial resilience amid a challenging operating environment.

Fitch also assigned BML a Local Currency Long-Term IDR of ‘CCC+’, two notches above the Maldives’ sovereign rating, reflecting what the agency described as the bank’s strong standalone strength and resilience relative to the sovereign.

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The ratings follow Fitch’s upgrade of the Maldives’ Long-Term Foreign-Currency Issuer Default Rating to ‘CCC-’ on 3 June, after the government successfully repaid a USD500 million sukuk in April and implemented a series of revenue-side reforms, including the Foreign Currency Act.

As sovereign ratings act as a ceiling for domestic financial institutions, Fitch noted that BML’s ratings remain constrained by the sovereign rating despite the bank’s underlying financial strength.

In its assessment, Fitch highlighted BML’s leading market position within the Maldivian banking sector. The agency cited the bank’s nationwide presence, digital banking capabilities and extensive support for retail, business and corporate customers as key competitive advantages supporting stable earnings generation.

Fitch also identified BML’s capital position as a major rating strength. According to the agency, the bank has maintained strong capital buffers through internal capital generation, prudent risk management and a measured dividend policy, enabling it to continue supporting economic activity and customer financing needs.

The agency acknowledged the challenging operating environment facing Maldivian banks, particularly persistent foreign currency shortages that continue to place pressure on sector-wide funding and liquidity. Fitch said BML’s strong franchise, stable deposit base and liquidity management practices have helped the bank remain resilient despite broader economic pressures.

Fitch further noted that BML’s lending portfolio reflects the structure of the Maldivian economy, with significant exposure to tourism and other key domestic sectors. While this concentration is typical of a small island economy, the agency said the bank’s experience, customer relationships and risk management framework support its ability to manage these exposures.

Commenting on the rating, BML Chief Executive Officer and Managing Director Mohamed Shareef said the assessment recognised the bank’s market leadership, capital strength and financial performance, while also reflecting its ability to navigate the structural challenges of operating in a small island economy.

“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,” Shareef said, according to a press release issued by BML.

BML said the ratings reflect its strong standalone financial profile, market-leading position and robust capital base. However, the bank noted that, like all domestic financial institutions, its credit ratings remain capped by the Maldives’ sovereign rating framework.

BML has recently faced criticism from customers over restrictions on foreign online transactions introduced in response to the Maldives’ ongoing structural US dollar shortage. Some customers have reported difficulties making payments for international subscription services, despite the bank stating that the new limits would not affect subscription payments. BML has since said it is addressing cases where such transactions have been declined and has urged affected customers to contact the bank directly.

The bank has also drawn criticism following changes to its cross-border transaction fee policy. While the fee of up to 30 percent was initially applied only to selected transactions made using certain debit cards, BML has now extended the charge to all bank-issued debit and credit cards for transactions with selected foreign merchants. The move has prompted concerns among customers about the rising cost of online purchases and international payments.