B. Tagliaferro & Sons Limited and the National Bank of Malta

As directors of Tagliaferro Bank Limited, the largest corporate shareholder in the National Bank of Malta and holder of 10 per cent of Tagliaferro Bank, we would like to refer to various articles in the press which directly or indirectly referred to loans afforded to the company in 1969. The public needs some clarification on this matter.

In 1968, the then Nationalist government had introduced the Banking Act whereby a bank could not trade in property. Tagliaferro, which owned a substantial property portfolio, was obliged to hive off its property holdings into a separate company. As the shareholders did not have the personal funds for this acquisition, they were obliged to take a loan, which it did from the National Bank of Malta which was secured by our entire property portfolio.

In 1969, Tagliaferro Bank joined the National Bank of Malta Group and the loan in question was comfortably serviced by our company with the dividends received from its National Bank of Malta shareholding and income derived from its other business interests. When the dividends were lost after the takeover of the National Bank of Malta Group, not only did we lose the income from dividends, but among other things we had to contend with over 114 requisition orders and an attempt by the government to take over the management of our company.

To add insult to injury, our loan was one of the famous ‘bad debts’ dreamt up by the Council of Administration. Notwithstanding all the obstacles B. Tagliaferro & Sons Limited paid back its loan plus all the interest to the last cent!

We refer specifically to the article in The Times (July 21, 2012) by Ivan E. Sammut who it appears is too young to have been close to happenings in 1973 and who simply relied on what was said in the late Edgar Mizzi’s (evidently biased) autobiography. He quotes Dr Mizzi saying that when the National Bank “took over Tagliaferro Bank in 1969 it became saddled with immovable properties which, though valuable, were not quickly convertible into cash”. As readers can see from our clarification about the loan above, it is clear that this was not the case.

The only properties that Tagliaferro Bank ‘saddled’ the National Bank of Malta Group with were a number of valuable, prime site properties which were used as bank branches. These branches, together with the personnel who ran them, not only served the National Bank of Malta but also became an integral part of Bank of Valletta.

We trust that this letter will finally put to rest the allegations regarding our debt which was fully honoured at a great cost to the company and its shareholders.