HSBC yesterday contested Prime Minister Joseph Muscat’s critical comments on the banking system and said it would continue to support the Maltese economy.

Bank of Valletta, the only bank over which the government still has some leverage, would not comment, not even on whether the government-appointed chairman, John Cassar White, was under pressure to resign.

“Please note that it is not the bank’s practice to comment on political statements,” a spokesman said.

An HSBC spokesman said the bank disagreed with Dr Muscat’s comments that it was not helping economic growth. On the contrary, it said “HSBC Malta continues to support the growth of Malta’s economy and that of our clients, including small businesses”.

Of course, he added, HSBC agreed with the government that banks had a key role in supporting the Maltese economy “in a sustainable way”.

Stressing that HSBC was committed to implementing the highest global standards of financial crime compliance, the spokesman admitted that regulatory obligations could cause some inconvenience to customers.

“We are committed to working with all stakeholders in the country to meet these binding obligations in a manner that protects Malta’s reputation while continuing to improve our customer service,” the spokesman said.

Top HSBC officials yesterday had a meeting with the Prime Minister at his office in Castille over the issue.

The Office of the Prime Minister was asked whether Dr Muscat had discussed his concerns with the banks prior to his public declarations in recent days, but no replies were forthcoming at the time of writing. It was also asked whether the Prime Minister was trying to influence the banks to ease their rigid lending policies.

Dr Muscat has complained that the banks are not helping economic growth. Saying they act as “glorified safe-deposit boxes”, Dr Muscat accused the banks of making it difficult for businesses to operate.

Top HSBC and Bank of Valletta officials said that they could not exclude the possibility that Dr Muscat’s comments were the result of businessmen complaining to Castille that they were not getting the lending facilities they wanted.

Banking industry observers said the comments were more likely to be directed at Bank of Valletta, which appeared to be adopting a no-risk attitude and was refusing to ease its lending policies, in contrast with what the government seemed to be after. “It is true that Mr Cassar White is a risk-averse banker and this is having its consequences for the business community,” the observers told the Times of Malta.

“However, European Central Bank rules and supervision are becoming very strict, and Bank of Valletta cannot do as it pleases,” they noted.

The observers said they were uncomfortable with Dr Muscat’s public comments on the banking sector, saying “this is not the way things should be done”.

“The Prime Minister should express himself in the right fora and not during partisan political activities,” they said.

ivan.camilleri@timesofmalta.com

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