Banks’ credit facilities to customers down by €200 million

Core domestic banks have seen customers’ deposits reach €16.5 billion while credit facilities to households and businesses stands at €9.4 billion in 2015.

But loans and advances to customers by the “core domestic banks” have decreased by €200 million from 2014’s €9.6 billion, when this figure had increased by 9% over 2013.

Malta’s banks have retained steady growth, strong capital ratios, high liquidity, and good profitability, as data issued by the Malta Bankers’ Association (MBA), shows.

The combined balance sheet total of the seven core domestic banks, which include Bank of Valletta, HSBC Malta, APS Bank, Banif Bank, Mediterranean Bank, and Lombard Bank, stood at €19.8 billion at the end of 2015 (2014: €19.1 billion). Total assets of all the association’s 28 member banks stood at €45.1 billion.

Customers’ deposits with the “core domestic banks” also increased by 7% to reach €16.5 billion in 2015 (2014: €15.4 billion), with deposits of all the banks now standing at €22.8 billion.

MBA secretary general James Bonello, said the trend clearly reflect the public’s trust and confidence in the banking system.

“Indeed, in its Global Competitiveness Report for 2015-2016, the World Economic Forum ranked Malta 15th out of the 140 countries surveyed in terms of soundness of its banking system.

“This gratifying outcome is the fruit of the prudent and responsible policies adopted by the banks locally over the years. These have stood them in good stead, and enabled them to come out of the 2008 banking and financial crisis largely unscathed, much to the satisfaction of their depositors, shareholders and staff.”

Loans to customers

The core domestic banks continued to support the development and growth of the Maltese economy by providing credit facilities to households and businesses to the tune of €9.4 billion as at the end of 2015.

Lending to individuals for house purchase was particularly buoyant, reaching €3.9 billion in December 2015.

As for the provision of finance to SMEs, the Central Bank of Malta’s “Survey on Access to Finance (SAFE) in 2015” found that 87% of applicants for loan finance and 75% of applicants for an overdraft “got everything” or “got most of it”, with only 8% of applications being rejected.

“These are reasonably acceptable numbers in my view,” Bonello said.

The number of full time bank employees has now increased to around 4,400, with total payroll touching €160 million last year. Net dividends paid to resident shareholders amounted to €49 million, whilst taxation on profit on ordinary activities totaled €82 million.

“Clearly, the direct contribution of the banking sector to the local economy remains significant. The development and growth of the economy largely underpins the banks’ own growth prospects and profitability. As such, the authorities and the banks share a common aim in this regard,” Bonello said.