Central Bank Governor Mario Vella would not comment or express his opinion on reports that one of Malta’s largest banks, HSBC, might be leaving soon.
“It is not our practice to comment on individual banks. We all read the papers so we all know what you are talking about. Perhaps you should ask the bank directly and my impression is that they have already expressed themselves,” Dr Vella said to a reporter who asked for his reaction.
The Governor was asked on the future of HSBC at the end of news conference which marked the publication of the Central Bank’s report.
Concerns on HSBC were fuelled last week by a report in business news agency Bloomberg. The bank declined to comment on what it described as speculation only.
During Tuesday morning’s news conference no reference whatsoever was made to HSBC until a question cropped up from the press at the very end.
Earlier Dr Vella had distanced himself from any ongoing controversies in the financial services sector, saying their remit was to “ensure systemic financial stability and to implement European Central Bank policy”.
He added that there was a “division of labour” with the Malta Financial Services Authority. It was up to the latter to regulate individual operators, he added.
In its annual report the Central Bank gave a positive outlook for Malta’s economy in the next three years. Economic growth is expected to decline slightly but would still remain at an average of 5 per cent, while unemployment will remain at an all-time low of 4 per cent.
Inflation is expected to increase to about 2 per cent by 2020, while government finances are expected to remain in the black, to the point that the debt to GDP ratio is expected to go down close to 40 per cent.
In the first three quarters of 2017, the general government surplus increased compared with the same period in 2016, driven almost exclusively by higher current revenue.
When measured on a four-quarter moving sum basis, the general government balance-to-GDP ratio recorded a surplus of 3.2 per cent, up from 1.1 per cent in 2016.
Meanwhile, government debt as a share of GDP declined to 53.4 per cent, from 56.2 percent in 2016.