Financial Services and Banking in Malta

Malta Financial Services Sector

Malta is a leading European financial centre which combines high regulatory standards and rigorous enforcement with a commercial, business savvy attitude. The financial sector has achieved rapid growth since the country’s 2004 accession to the EU and the island is now rightly seen as having a sound and sophisticated financial system. This has led various businesses to choose Malta as their home, including hedge funds, insurance captives, fund managers, investment services providers, credit institutions, insurance intermediaries and forex operators of various types. Thanks to its EU members, low cost and fiscal base, English speaking workforce and geographical location, Malta is very well suited to the role of international financial centre, and is particularly well adapted to serving as a platform and base of operations of businesses looking to penetrate the European and North African markets.

With over 6,000 people currently employed in the financial services sector, the industry has seen a sharp growth over the past decade. The industry presently contributes to a substantial 12% of Malta’s GDP. This growth was mainly substantiated due to various reasons, mainly due to reduction in bureaucracy, streamlined procedures, lower fees and compliance costs and a consistent implementation of standards. The main aim of the Maltese government is the keep abreast of developments in the industry with the objective to maintain Malta’s competitiveness in the industry.

Banking Activities in Malta

Malta is known for its efficiency and robustness in the banking sector. The two major banks in Malta are currently HSBC Bank Malta and Bank of Valletta (BOV). Both banks offer bank accounts in hard currencies with widespread, state-of-the-art and safe online banking facilities having varying levels of controls depending on the user’s needs. There are also other smaller banks which offer customized services to their clients.

With some of the safest and most liquid banks in the eurozone, Malta is establishing itself as an international banking centre and hub for finance in the Mediterranean region. Rapidly growing and dynamic, Malta-based banks currently hold over €30 billion in deposits. Over the past decade or so, the banking sector has transformed itself from one having four retail banks serving the local population to a reputable international banking centre. This influx, which includes several leading banking groups, has added dynamism to Malta’s thriving financial services industry, and the expectation is that many other banking institutions will follow this lead.

Malta’s strong banking sector has long been the country’s backbone, supporting the growth of various other sectors. Capital buffers retained by local banks are among the highest in Europe, and Maltese banks have consistently returned solvency ratios that are almost double the EU average. Malta has seen a significant transformation in its banking sector over the last decade, from a tightly controlled publicly owned sector to one of liberalisation and foreign ownership. The country has attracted some of the most highly respected names in institutional finance to establish operations in Malta and use the country as a strategic launch pad for future expansion into Europe, Africa and the Middle East.