Banking Sector

Banking Sector

A recent study compiled by the European Central Bank has identified Malta’s banking sector as being one of the most robust and resilient within the EU. In fact, for the second year running, Maltese banks have returned solvency ratios that are almost double the EU average. The capital buffer retained by local banks at 16.2% was also by far, Europe’s highest with second placed Lithuania being the only other country to achieve double digit figures in the area at 10.1%. This was no doubt influenced by the minimal impact that was experienced by the local banking sector following the recent international financial crisis and turmoil in the global banking industry. Malta’s banking system has also been ranked as the tenth soundest in the world in the World Economic Forum’s Competitiveness Index 2008/09. This is further testament to the sound, reputable yet practical legislative framework laid out in the Malta Banking Act and the active monitoring undertaken by the regulator, the Malta Financial Services Authority (MFSA).

The sector has and continues to experience significant growth and in fact over the past few years from four retail banks we now have over 24 foreign or privately owned credit institutions and 15 financial institutions licensed by the MFSA. These include some of the most highly respected names in international finance who have chosen to establish a presence in Malta as well as a number of trade finance banks offering highly specialised trade related instruments. The banking segments available in Malta include retail banking, private banking, investment banking, commercial banking, trade finance, project finance, treasury and the provision of syndicated loans.

Prospects for future growth remain high not only within the domestic market but also internationally with expansion and development within the North African and Middle Eastern markets in particular. In fact a number of Maltese banks have been directly involved in financing infrastructural projects within these areas. Domestically, business confidence remains positive and in fact business loans continued to grow during the past year despite fears of a recession. Consumer credit has also registered year to year increases together with the value of deposits which as at 2009 stood at €16.8 billion.

The commercial banks can open accounts in all the major denominations and most will also provide customers with online viewing. The larger banks have full blown internet based banking facilities which are highly secure and which give real time access to banking information from anywhere in the world. Corporate and Personal Visa, MasterCard or American Express cards are also available.

Both non resident companies as well as individuals may operate bank accounts in Malta. Any interest earned by such qualifying persons on deposits placed with local banking institutions is exempt from any form of taxation and there is also no exit tax on either the capital or the income generated.

Capstone can assist resident and non-resident persons or body corporates with all the formalities involved in setting up bank accounts and with their ongoing administration. Through our network of associate firms, which gives us a global presence, we can also assist clients to establish Corporate Bank Accounts or Personal Bank Accounts outside Malta.