In his article ‘Enforcing a level playing ground’ (The Sunday Times of Malta, Classified, March 20) Douglas Salt incorrectly attributes to Lohombus (Loans for Homes and Business) the introduction of mortgage loans in Malta.
In reality, this type of finance, for terms ranging up to 25 years for home loans and 10 years for business finance, was introduced here in 1968 by Barclays Bank as a wholly-owned subsidiary with the name Barclays Finance Corporation (Malta) Ltd (Barfincor for short).
I was entrusted with all the preparatory work and was appointed the corporation’s first manager. At the time the commercial banks were not permitted by the Central Bank of Malta to lend for a period longer than five years. Thus, business was brisk as the building boom had already taken off.
Indeed, Barclays London decided to use the Malta model for setting up a similar corporation shortly thereafter in Cyprus and the manager designate was sent here for a period of assimilation.
When the government assumed ownership and control of the National Bank of Malta Group in December 1973 (initially by way of a council of administration and later as Bank of Valletta) Barclays was made to pass on to BOV 50 per cent of Barfincor’s equity, the rationale being that there was no space in Malta for two competing medium- and long-term lenders.
It was then – a good six years after inception – that the corporation’s name was changed to Lohombus.