Carmel Tonna, Gżira
Strange banking behaviour by BOV
The decision by Bank of Valletta to issue a fuzzy statement on the impact of Lehman's collapse on its operating results smells fishy - it is more so when one considers the fact that the bank failed to give any serious indication of the impact on it.
This smell is further fouled by the MSE's lifting of the price threshold trade range for one day. Someone seems to be hell bent on depressing the price of BOV shares in order to facilitate some near future manoeuvring with the bank's shares.
The issue by HSBC of the 5.9 per cent €2.5 million bond 2018 also raises eyebrows. HSBC claims that the reason for the offer and use of proceeds from bonds is to meet part of its general financing requirements.
What do these requirements include? There is nothing to stop investors from thinking that such requirements may include covering a tiny part of the losses incurred by HSBC (global) following the current financial turmoil. But the cherry on the pudding is that HSBC has decided not to seek a credit rating of an independent rating agency for the bonds on offer. The prospectus lists risks involved but not the level of each risk. So, there is no assessment by any rating agency when all hell has broken loose in the financial sector.
And the MFSA?
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Joseph Attard
Sep 24th 2008, 15:59
BOV s comment leaves much to be desired. The public has a right and MFSA as a regulator needs to investigate and make sure that what BOV are stating is the truth , the whole thruth and nothing but the truth.
I hope we wont wake up one day soon to another local financial tragedy!
Clifford Davies
Sep 24th 2008, 14:34
If the banking system in Malta hasn't been effected by the US latest crunch, boy then they must be hideing something from us or try'g to pull a fast one, because ALL banks are effected one way or another wround the globe by this latest downturn including the rise in oil. The worst is yet to come so beware and get the facts right before we all end up crying all the way to the banks Bov or not, its no exception. Listen to sky news might help.
l Galea
Sep 24th 2008, 12:56
I had asked what was the amount of losses suffered by BOV.
I had also asked whether the bond issue by HSBC was due to lack of liquidity at the bank.
No answer was forthcoming from the two banks.
MFSA? This is another of those only in Malta cases.
Louis Gatt
Sep 24th 2008, 11:17
One thing I can't understand is the secrecy (omerta?) which surrounds financial institutions. The MFSA should protect the consumer and stake holder by providing real current information! It's so easy to say that shares may go up or down without focusing on the actual issue of situation. This is a generic indemnity which only covers financial institutions! How about active guidlines?
As to BOV, I expect an immediate clarification. Moderate impact does'nt mean anything to me. If the board of directors don't give a hoot about stakeholders, the MFSA should step in. Precious time is passing by and nobody knows what's going on behind the scenes with our money. What about directors' personal responsability? Will they be responsible for our loss of revenue? How safe was it to invest in Lehman Investment Bank? If we wanted to invest in the US market we (the stake holders) could have done that ourselves!
It sure looks like investors are always the target of bad financial institutions' management. Local financial institutions charge hefty commission fees for simple transactions. They're better off than the investor!
My plea is that the MFSA should roll up it's sleves and protect the investor/stakeholder visibly.
C. Micallef
Sep 24th 2008, 10:34
I am in complete agreement with Mr. Tonna.
BOV's statement did not make sense. The fact that disaster struck in the last quarter of the financial year did not make a huge impact does not make sense. It makes sense only if the interest/income is considered - but what about the value of the investments or debts - any material drop in the value will have an impact on the year's accounts, no matter in what quarter it occurs.
Unfortunatley, accounting practices and standards that cater for fair value do not solve any problem, and I am very worried that someone at some bank may be tempted to postpone the possible losses or accruals to a later stage. I just hope I'm wrong. But when you hear that Middle Sea have posted loss for the first time in years, how come the BOV are so confident? And what about the HSBC? Yes, the issue raises plenty of eyebrows.
As for the MFSA - it's just a barking dog with no teeth.