whereasmuchofeurope
suffereda
debilitatinghitduring thefinancial crisisof
the lastdecade,Maltawasoneof the last
countriesstruckdownby recession, and
thenoneof thefirst to rebound. Inpart, this
canbeattributed toadiversifiedeconomic
base, but itcanalsobe traced toastable
bankingsystem rated the14thsoundest in
theworldby theWorldEconomicForum's
Competitive Index2013–2014.
"Thebanksarebigger than the
government, so theyhave tobe responsible,"
saysBankofValletta (BOV)CEOCharles
Borg. "Otherwise, ifwehaveproblemsand
go to thegovernment forbailouts, theyhave
togo to theEuropeanCommission like
Cyprus, IrelandorSpaindid, andwedon’t
want tobe in thatposition."
Traditionallya retailbank,with44
branches throughout thecountry,BOVhas
maintainedaconservativeapproach that
saw it ranked thesafest in thecountryby
Global Finance
magazine in2014. Its funding
issourcedmainly fromcustomerdeposits,
ensuringahigh liquidity ratio,whileonly
home loansaccount formore than10%of
itsdiverse loanportfolio.
"Wecameoutof thiscrisis inabetter
way thanwecame in to it,"saysBorg. "That
showsBOVhasput in the right foundations
tobuild itsbusinessgoing forward."
Today, thebank is facingchallenges
A D V E R T I S I N G S U P P L EME N T
BankingonMalta
fromcompetitionandacontinued low
interest rateenvironment. In response, it's
complementing its lendingwithnewnon-
interest-basedproducts.
"We'vebeensuccessful in implementing
new linesofbusiness tocontribute
revenue, suchasVallettaFundServices,
VallettaFundManagement, tradefinance,
foreignexchange, ourcardbusinessand
stockbroking,"saysBorg. "Ourprofitability
onayear-to-yearbasishas increased. The
bankhasavery large footprinthere, butby
international standardswearesmall.Butwe
haveall theservicesothershave."
Thisbroadoffering is representative
of awidergrowth inMalta'sfinancial
A transparent regulatoryenvironment anda soundbanking systemhave led to
theemergenceof oneof Europe's fastest-growingfinancial servicescentres
services industry,which isquicklygaining
international repute for itsflexibilityand
cost-effectiveness. Thesector isexpanding
byclose to25%annually, andaccounts for
12%ofGDPandaround10,000 jobs.
Thisgrowthbegan inearnest in2004,
withMalta'saccession to theEU. In2007,
FinanceMaltawasestablished topromote
thesector inandoutside thecountry.
Anon-profitpublic-private initiative, it
mobilises the resourcesofgovernmentand
industry tomaintainamodernand robust
frameworkwithinwhichfinancial services
companiescan thrive.
"Wewant tostrengthen thebrandof
Maltaoutsideourshoresand facilitate
networkingopportunities forour
members,"saysKennethFarugia, chairman
ofFinanceMaltaandchiefofficerof fund
servicesatBOV. "If you lookat the industry
today, it's totallydifferent towherewe
started. Forexample, in2004,wehadeight
insurancecompanies. Todaywehave16,
predominantly international. TheMaltese
operatorsused towrite€400million-worth
ofbusiness. Today it's€2.5billionand the
majority isdiscovering risksoutsideour
shores. It'san industry that isgrowing."
“Wecameoutofthiscrisis in
abetterwaythanwecame
into it.ThatshowsBOVhas
put intheright foundations”
CharlesBorg
MALTA'S FINANCE SYSTEM
HOLDS OVER €50 BILLION IN ASSETS
– ALMOST EIGHT TIMES THE COUNTRY'S GDP
CharlesBorg,CEOofBOV
