Bank of Valletta flies the flag at Harrods

Bank of Valletta hosted a series of very well organised Business Networking Events during the first two weeks of March at Harrods – as part of the ‘This is Malta’ campaign at the world famous luxury store in Knightsbridge, London being held this month to commemorate Malta’s 70th anniversary as a George Cross Island.

Our objective is to promote Malta as a jurisdiction and BoV as a strong and reliable partner when doing business in Malta

Charles Borg, BoV’s chief executive officer, told The Times Business: “As the largest financial institution in Malta, we believe that this initiative provided us with the ideal platform to continue to promote Malta as a competitive, well regulated and reputable destination for the domiciliation of a wide range of operations related to financial services.

“The business networking events we organised showcased Malta as an emerging financial centre supported by a strong and resilient banking sector wherein BoV commands the largest share in deposits, loans, treasury and capital markets activity.”

Aldo Scardino, executive head, BoV Wealth Management, said: “Our objective is to promote Malta as a jurisdiction, BoV as a strong and reliable partner when doing business in Malta, and the bank’s international corporate centre that focuses on the servicing of international corporates and institutional clients doing business from Malta.”

The most recent Business Networking Event was held on March 14 in a private dining room located at Harrods’ wine department, which I was invited to attend, and which was entitled: ‘The benefits of structuring mergers and their acquisition transactions in Malta’. It was addressed by Mr Borg, Mr Scardino, and Louis de Gabriele from Camileri Preziosi Advocates who illustrated the legal framework needed to set up corporate structures in Malta with the objective of acquiring, managing and disposing of assets.

This event was attended by Mark Harrison (Ernst & Young), Simon J Gunson (JP Morgan), Richard Henry (Barclays Capital), Stephen M. Maltby (British Arab Credit Bank), Mike Hughes (Grant Thornton), Trevor Olney (Barclays Corporate), Penelope Bridges (Delphinium Partners), Giles Lang (Deloitte), Peter Beckett (KPMG) and Andrew Sultana (BNP Paribas).

Mr Borg told the participants that Bank of Valletta was very conscious of its responsibility towards the Maltese economy and the level of the bank’s services offered to its clients was constantly changing. He also stressed the Malta has a very open economy and was therefore influenced by the global economic climate, particularly in the country’s main trading partners such as the UK, Germany and Italy. He also highlighted the fact that the “Big Four” auditing firms were well established in Malta and that the country had a long history of political stability.

Mr Scardino presented the participants with the main highlights of the Maltese economy and stressed the fact that Malta’s well regulated financial system contributed to the domestic banking sector remaining relatively unscathed from the worst effects of the international credit crunch. He pointed out that the Maltese government did not have to inject capital or provide liquidity support to the local banking sector during the financial crisis.

Mr Scardino also gave an overview of Bank of Valletta’s financial performance, stressing that the bank made a pre-tax profit of €64.4 million in 2011, boasted a strong liquidity ratio of 44.4 per cent and a Tier 1 capital ratio of 10.5 per cent and had total assets of €6.6 billion as at September 2011.

Dr de Gabriele spoke about Malta’s favourable tax treatment and its corporate law set-up as the main mergers and acquisitions criteria. He explained how recipients of dividend income may become entitled to refunds of company tax paid depending upon the business activity from which the profit has been generated. The quantum of the refund varies according to the tax account out of which the profits are distributed, the nature of the profits being distributed and whether any double tax relief has been claimed by the distributing company in respect of the profits so distributed. In certain circumstances, these refunds reduce the effective tax burden on distributed profits to between zero per cent and 11.7 per cent.

Dr de Gabriele explained that in order to claim a refund, a distribution of profits must take place. A 100 per cent tax refund is available in the case of certain distributions from the Foreign Income Account of a company derived from a participating holding. The Foreign Income Account comprises categories of foreign source income such as dividends, interest, capital gains, royalties and other similar income, and also includes dividends paid out of the Foreign Income account of another company registered in Malta.

Where the 100 per tax refund is not available a shareholder may, subject to the satisfaction of certain conditions, have the possibility of claiming other refunds, namely 6/7ths, 5/7ths or 2/3rds of the Malta tax paid. Dr de Gabriele also spoke about the 35 per cent capital gains tax, the 12 per cent flat rate of 12 per cent on the transfer value, VAT and the numerous double taxation treaties which Malta had concluded with various countries.

A lively discussion followed the presentations with many of the participants enquiring about the stability of Malta’s political system, the political consensus in favour of Malta’s financial services sector being a main pillar of the economy, the potential for Malta offered by the recent events in Libya, the nature of Malta’s legal system and whether the country’s tax regime would continue to have the full support of the European Union.

Dr de Gabriele explained that in 2007 the European Commission had challenged aspects of Malta’s tax regime, but this was soon cleared. He stressed to the participants that Malta was certainly not an offshore financial centre and its tax system was fully compliant with EU law. Dr de Gabriele told those present that a company in Malta could be set up in one to two days.

Mr Borg said he believed Libya offered huge opportunities for both Bank of Valletta and Malta, and stressed that Malta was a politically very stable country where the two main political parties were committed to making a success of the financial services sector.

Three other Business Network Events were organised by Bank of Valletta at Harrods. The first, ‘Think Malta – Trust Malta – Personal Estate Planning and Corporate Trusts in Malta’ was addressed by Andrew Chetcuti Ganado and Mark Agius from BoV. The two speakers discussed personal estate planning and corporate trusts in Malta as well as BoV’s value proposition as a “one stop shop” trustee in Malta. The event was also addressed by the director of strategic partnership at Barclays, Derek Westpfe.

The second event focused on structuring insurance and risk management solutions in Malta. Aldo Scardino from BoV talked about Malta’s position as an emerging financial services centre and an ideal jurisdiction for international business. He highlighted the BoV Group’s role as the financial services partner of choice when doing business from Malta. Matthew Bianchi, partner at Ganado & Associates, addressed this meeting and gave an overview of Malta’s insurance law and regulation while guiding the audience through the opportunities available to insurers and risk managers in an integrated market.

‘Malta – A European Fund Domicile Gaining Strong Growth Traction’ was the third event and was addressed by Kenneth Farrugia, chief officer of BoV’s funds business who talked about Malta’s paradigm shift in the funds industry. Andrè Zerafa from Ganado & Associates also explained the legal framework regulating investment funds in Malta.

A Bank of Valletta spokesman told The Times Business that from the feedback he received the format of the talks at these business events were a great success and extremely effective. “Perhaps it is an eye opener on the way we should promote Malta as a jurisdiction and the bank’s services – a clinical approach and direct to the gatekeepers,” he said.

CEO Charles Borg said: “The financial sector is a growth area for Malta, however it does not come by itself, it is a combination of a sound regulatory framework, responsiveness from the Regulator and hard work from the industry practitioners. The most important thing now is for us to follow up on these contacts.”

Harrods flew the Maltese flag in celebration of Malta’s promotion at the world-renowned store, and will continue to do so until March 28. There is also an array of stunning displays of Maltese photography and artwork, Mdina blown glass and Maltese antique silver throughout the luxury store to give visitors a taste of the modern and traditional delights of Malta. Bank of Valletta digital displays and a showcase are also on show throughout Harrods.

On the evening before BoV’s fourth Business Networking Event, a reception hosted by Malta’s High Commissioner in the UK, Joseph Zammit Tabona, was held at Harrods Georgian Restaurant. The reception was attended by Prime Minister Lawrence Gonzi and Mrs Gonzi, Finance Minister Tonio Fenech, Tourism and Culture Minister Mario de Marco, Finance Malta chairman Kenneth Farrugia, MTA chief executive Josef Formosa Gauci, BoV CEO Charles Borg and BoV chief officer operations Michael Galea, among others.