Fitch endorses Maldives' recovery as BML stands strong at heart of economy

Bank of Maldives (BML) has been assigned a Long-Term Issuer Default Rating (IDR) of 'CCC-' with a Stable Outlook by Fitch Ratings. 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 Ratings' upgrade of the Republic of Maldives' Sovereign Long-Term Foreign Currency Issuer Default Rating to 'CCC-' on 3 June 2026, following the successful repayment of the USD500 million Sukuk in April 2026, in addition to vital revenue-side reforms alongside the implementation of the Foreign Currency Act. As the sovereign rating acts as a ceiling for domestic financial institutions, BML's ratings remain constrained by the sovereign rating despite the Bank's strong intrinsic financial profile.

In its assessment, Fitch highlighted Bank of Maldives' 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. The Bank's 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.

Commenting on the rating, CEO and Managing Director, Mohamed Shareef, said: "We are pleased to publish our rating from Fitch Ratings, which recognises 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. 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."

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.

Fitch Ratings' latest assessment delivers a strong signal of confidence in both the Maldives' economic trajectory and the strength of its financial sector. Following the successful repayment of the country's USD 500 million Sukuk and the implementation of key economic reforms, Fitch upgraded the Republic of Maldives' Sovereign Long-Term Foreign Currency Issuer Default Rating to 'CCC-', reflecting improving confidence in the country's economic management and financial outlook.

The positive assessment extends to Bank of Maldives, which received a Long-Term Issuer Default Rating of 'CCC-' with a Stable Outlook. As the country's largest financial institution, BML continues to play a central role in supporting economic activity, facilitating trade, enabling investment and providing essential banking services nationwide. Fitch highlighted the Bank's strong market position, robust capitalisation and prudent management practices as key strengths.