Malta banking sector holds firm

Malta and Luxembourg were the only two countries in the eurozone which did not see any decrease in the number of credit institutions between 2008 and 2012, according to a report issued this week by the European Central Bank. There was a decrease of 10 per cent in the number of credit institutions, from 2,909 to 2,645, with Greece, Spain and Portugal seeing the largest decreases. Pronounced declines were also noted in France, Italy, and Cyprus.

At the end of 2012, the eurozone had 171,477 bank branches, a decline of over 16,200 units (8.7 per cent). Banking sector assets in the eurozone on a consolidated basis, excluding very small entities, had dropped by almost 12 per cent compared with 2008. The assets stood at €29.5 trillion, with the major part of the adjustment taking place in 2009 as the crisis unfolded. The share of loans in total assets fell in the majority of countries, especially in 2011 and 2012.

The ECB Banking Structures Report analyses the main structural developments in the eurozone banking sector from 2008 to 2012 and includes indicators for the first half of 2013. On average, the eurozone had 158 inhabitants per bank worker in 2012, up from 145 in 2008. There remain large differences between countries in terms of the size of the banking sector in relation to the size of the economy. Another fact to emerge from the report is that Malta has an ATM machine for every 2,128 people, compared with the eurozone average of 1,035. This is the fourth largest, with Finland having the sparsest ATM coverage with one machine for each 2,404 people. The most dense coverage was in Portugal, where there is an ATM for each 616 people.

******************************************************* 

No cap on the number of people who can buy Maltese citizenship

There will be no annual cap on the number of people who can buy Maltese citizenship through the proposed Individual Investor Programme, the CEO of Henley and Partners, Eric Major, said today. Henley has won a public tender to market and manage much of the programme. Mr Major said there was a “natural limit” to the amount of people who could purchase citizenship through the scheme “because it is quite expensive” and the processing will take time.

He said he would be disappointed if the annual number of beneficiaries was not “in the low hundreds”, adding that the Government was minded to increase the price if there was strong market interest. Mr Major told timesofmalta.com that he was unsure if the government would reveal the number of people who gained citizenship through the scheme, but from his perspective there should be no objection to doing this. “It is meant to be an open and transparent programme,” he said.

If the programme is approved by Parliament, applicants will be able to purchase Maltese citizenship for €650,000. They must also pay €25,000 for their spouse to acquire citizenship and a further €25,000 for each child under 18. Parliament votes on the programme tomorrow. Mr Major also said that St Kitts and Nevis, Antigua & Barbuda and Dominica were the only other countries in the world, apart from Malta, that sold immediate citizenship against a fixed donation.

******************************************************* 

Notes wind in Malta's sails gaining strength

The Finance Ministry this morning welcomed the remarks by the European Commission, as presented in its European Economic Forecast for Autumn 2013, published on Tuesday 6 November. The Commission’s remarks are further validation that the Maltese economy is gradually picking up speed, thanks to the prudent fiscal administration and forward-looking policy approach of the new Government, the Finance Ministry said in a statement. Minister Edward Scicluna said that “it is quite telling that the Commission carried over the metaphor of the strength of the wind in Malta’s sails, which I had described to them in our meetings last April as being quite feeble. I had in fact asked the Council not to impose any corrective actions which would stall our boat.” The Commission notes that Real GDP surprised positively by growing by 2.8 per cent in the first half of 2013, up from 0.8 per cent in 2012.The Commission also notes that Real GDP is forecast to grow by 1.8 per cent in 2013 as a whole, and 2 per cent in the following years. These rates exceed the Government’s own prudent forecasted rates. The Ministry welcomes the Commission’s remarks regarding Job Creation and Employment, wherein it noted that “Job creation surprised positively in the first half of the year thanks to the tourist sector and the newly-emerging, labour-intensive activities in the services sector.”

Regarding the labour market reforms, the Ministry is especially pleased to note that the Government’s commitment to increase the labour market participation of women through initiatives such as free child care centre services for working parents are being especially recognised by the Commission. Indeed, the Commission notes that “employment growth is projected to moderate slightly over the forecast horizon, but to remain relatively strong at 1.8 per cent per annum, well above the euro-area average.” The Ministry also takes seriously the Commission’s remarks that the deficit in 2013 is expected to increase slightly to 3.4 per cent of GDP, and remain constant for the following year also. It notes that the Commission concluded its forecast before the presentation of the Budget 2014, and prior to the full report of the Commission on the Draft Budget to be completed by the 22nd of November.

The Ministry is confident that the Government will close 2013 with a deficit of 2.7 per cent and is committed to further lowering the 2014 deficit to 2.1 per cent. The Ministry also welcomes the Commission’s favourable position on a number of structural reforms which the Government undertaking - most notably in the energy sector, which the Commission notes “are likely to drive down industry costs if properly and timely implemented, and strengthen the medium-term growth outlook.” Finally, it is a first that the Commission states that the risks to its forecast for Malta for 2013 are “on the upside”, meaning that the current outlook could turn out much better than projected.