Banif Investment Bank to base team with regional brief in Malta

Banif Group’s investment arm is to permanently base a two-member team with a brief to win business across the region within Banif Bank Malta’s commercial operation, Banif Investment Bank president and chief executive Artur Fernandes told The Times Business.

Banif Investment Bank has no formal operation in Malta: officials currently travel to the island from Lisbon and Barcelona on bank business. But potential across the Mediterranean and North Africa has prompted Banif to relocate a Portuguese official who will be teamed with a Maltese professional with local knowledge.

Incorporated in December 2000, Banif Investment Bank operates in capital markets, investment management, and advisory services and banking.

Mr Fernandes was in Malta last week to address the Banif Forum 2011, an event aimed at showcasing infrastructure opportunities in Malta. It was organised by Banif Investment Bank with the support of Banif Bank Malta at the Hilton in St Julians.

The forum was attended by mainly Portuguese developers, operators, legal advisors, infrastructure fund managers, all of whom, Mr Fernandes explained, had an interest in understanding local infrastructure opportunities. Participants were mainly Portuguese clients of Banif Investment Bank who had previously worked with the institution on important projects in Portugal, Spain and Brazil.

The guests had been briefed on Malta’s economy, financial indicators and development before travelling to the island. They were also given tours of several sites of potential interest to them after the event.

At the forum, deputy Central Bank Governor Alfred DeMarco gave an overview of the Maltese macro-economic situation while Transport Malta and Grand Harbour Regeneration Corporation chairman Mark Portelli outlined strategic infrastructure development plans.

Banif Bank Malta’s chief executive Joaquim Silva Pinto explained the Maltese bank’s pivotal role in the sector, before Vasco Pinto Ferreira, a member of Banif Investment Bank’s board, highlighted the different nature of corporate and project finance.

There were presentations by Simon Tortell & Associates senior partner Simon Tortell, Small Business and Land Parliamentary Secretary Jason Azzopardi, the Office of the Prime Minister’s Planning and Priorities Co-Ordination Department director-general Marlene Bonnici, Malta Chamber of Commerce, Enterprise and Industry president Helga Ellul, Malta Enterprise executive chairman Alan Camilleri, and Finance Malta chairman Kenneth Farrugia.

With a career in banking spanning 27 years, Artur Fernandes, who previously worked at Deutsche Bank and Salomon Brothers International, is the chairman, vice-chairman, director or chief executive of more than 20 operations within the Banif fold, including Banif Bank Malta.

At Banif Investment Bank he heads a sophisticated, award-winning team which has honed its skills in structured finance for the past 10 years. He said the team was now prepared to export its skills to other countries, even those where Banif was not represented but where it saw significant potential.

Mr Fernandes said similarities, both historic and economic, between Malta and the autonomous region of Madeira where Banif was founded and is headquartered, augured well for the bank’s future growth in Malta and across the region.

“Madeira has the same economics of Malta: similar population size, GDP, and a major tourism sector,” Mr Fernandes explained. “It adopted the euro, has an Anglo-Saxon legal framework, and is English-speaking. These similarities could give us very good ground for expansion. Malta can be a platform for us to the Middle East and North Africa. We can use the bank in Malta to support deals and services that we can achieve in other countries in the region.”

Back in Portugal, the central bank has forecast a recession this year with a sharp contraction in domestic demand. The country’s 10-year bond yields recently rose to 7.26 per cent although the market rallied when Portugal sold €750 million in a debt auction.

Mr Fernandes said the mood had been changing in Portugal over the past two years but the population was very resilient. The international crisis, which he insisted did not start in Portugal or the EU, hit the country after 20 years of growth and prosperity and EU accession. It had also served to surface the fragilities of the EU, among them a single currency used by countries with different fiscal and budget policies.

The US was facing a similar problem but there was a major difference in that the US had a federal government and the EU did not.

Mr Fernandes said he personally favoured common policies and a stronger union where ministers defined more systematic rules – that could, within limits, allow for local government independencies – so that states did not act unpredictably and financial imbalances which damaged the union were lessened.

Would Portugal ask for a bail-out as Ireland had done?

“IMF intervention has this bad connotation,” he replied. “It implies that we do not know how to rule ourselves and someone has to impose rules. From a financial perspective, it is not as bad as people might think. The IMF is like a banker to a corporate.

“Some economists are in favour of this intervention. Portugal is like a gate to the rest of Europe. If you allow this to happen, the next target will be Spain, which has its own set of problems: a higher rate of unemployment and a financial system that is in a very difficult situation because of the real estate sector. When you open the door of Portugal to IMF aid, the markets sitting in trading rooms will then have Spain as the next target to bet on the possibility of submitting for IMF help. That puts pressure on all of Europe. It never ends.”

Mr Fernandes said the EU and the ECB had to send out a strong message that the euro was there to stay and that all EU countries had to comply with what was resolved in Brussels.

Moody’s last week warned that Portugal was heading for a credit downgrade in the wake of high debt levels, fears over economic growth, and funding challenges faced by the banks.

Questioning the wisdom behind rating agencies revealing such plans to which markets would react, Mr Fernandes recalled the three US-based agencies had “not been very attentive to what was happening in the market” over the past two years.

“Now they want to seem very accurate,” he added. “Rating is necessary for assessment purposes but the agencies should not be paid by the corporates they rate because there is a conflict of interest. Secondly, the auditors should not be paid by the companies they audit. We want to trust the agencies more. Confidence takes years to build and seconds to lose.

“Agencies need to understand what is at stake: This is not specifically a problem of Greece, Portugal or Ireland. They have to assess the risk of each country within the context of the imbalances that exist in the EU’s present legal framework. It is not a risk in itself in absolute terms. Why not rate the EU? Why not then rate the countries, so there is a reference? Are countries rated on a sole, individual basis? And compared to whom? The US, Japan, Russia? Rating on absolute individual terms does not seem adequate for a country that belongs to an enlarged EU.”

Mr Fernandes was confident Portugal would find a way out of the current crisis. Portugal, he stressed, should not be defined by its deficit, but by its strategy, policies, and investments.

“Deficits in themselves are not wrong or bad,” he added. “What should be judged is not the deficit, but what this deficit may bring to the country in future.”