Financial services register annual 30 per cent increase

The Malta financial services sector registered an annual 30 per cent increase during the last three years contributing to economic growth and the employment of more than 9,000 employees directly and indirectly in the sector, Minister for Finance Tonio Fenech told Parliament yesterday.

Introducing the second reading of the Bill amending various financial services laws, he said he sector attracted a wide spread of services including captive insurance, treasury management, trusts, collective investment schemes and other specialised funds. This contributed to its sustainability.

Malta enjoyed a high reputation in international circles and remained on the white list throughout the international financial crisis. It had been classified in the 11th place in international financial markets for 2010-2011 from 13th place the previous year.

Maltese banking institutions were placed in 10th place from the 13nth in 2009 as regards soundness. The strength of Maltese banks had been confirmed also from European stress tests and the IMF Report. The Ecofin and European banking supervisors had conducted an exercise on the main banks in EU countries with Malta being classified positively.

The MFSA had last year issued five new licences each to banking financial institutions and to insurance companies when compared to the issue of one licence to banks and four to insurance companies in 2009.

Licences for authorised trusts increased by two in 2010 from the 10 issued in 2009. A total of 108 other collective schemes were awarded licences last year when compared to the 105 issued a year earlier.

Five new banking licences were issued, increasing the amount of credit institutions to 25, 22 of which were foreign owned. Deposits reached the €26 billion mark registering a 124 per cent increase when compared to 2005. Minister Fenech said that it was prestigious that the Deutschbank was among the banking institutions given a licence to operate in Malta.

Finance Malta and Malta Enterprise joined forces in marketing the financial services sector in European countries, in China, South Africa and the Arabian Gulf.

The government had initialised a double taxation agreement with Russia and was working on a similar agreement with Uruguay. It had entered into discussions with other South American countries.

A mutual recognition agreement had been entered into with China facilitating investment between the two countries. The MFSA had also established guidance notes for Sharia investment funds to promote Malta in markets influenced by Islamic ways of financial services.

The Bill implements a number of EU directives including the supervision of electronic money institutions and the regulations and administrative provisions relating to undertakings from collective investment in transferable securities known as UCITS.

The aim was to strengthen the regulatory framework to safeguard investors against lack of supervision and transparency as happened in the world three years ago.

Minister Fenech said that government and opposition had always promoted this sector. It was important to continue this cooperation so that Malta would continue to be regarded as an excellent financial centre. It was important for the MFSA to continue to guarantee high standards while providing efficient and quality services.

It was important to continue attracting young people with a university education and students from Mcast because of the wide variety of opportunities in the sector. These opportunities were open also to people with qualifications in chemistry, engineering and mathematics. The sector also offered clerical and accounting technician jobs.