Bank of Valletta is not considering some lending proposals “in order not to further increase the concentration in certain sectors of our economy”, its chairman, John Cassar White says.

In a Talking Point published today (see back page), he notes that banking regulators “expect banks to adopt tighter criteria when approving certain types of speculative lending”.

Mr Cassar White points out that Maltese businesses are among the most reliant on bank financing in the EU, because they invest too little of their own money in the business. “If local businesses were to invest more equity in their businesses, they would find local banks more inclined to lend them money,” he adds.

He says that when lending depositors’ funds to businesses and individuals, the bank has to manage the risks. “This is not about being risk averse but about being prudent in managing depositors’ money,” Mr Cassar White says, in reference to a news item that appeared yesterday in which bank industry observers were quoted as describing him as “a risk-averse banker”.

Over the past few days, Prime Minister Joseph Muscat has complained about the rigidity of loan polices and accused banks of not helping in economic growth. He even described the two major banks as “glorified safe-deposit boxes”.

Observers noted that Dr Muscat’s comments were likely the result of businessmen knocking on his door and complaining they were not getting the loans they were asking for.

ivan.camilleri@timesofmalta.com