Interest in high deposits

IIG Bank is an affiliate of the International Investment Group LLC, an established global trade finance manager based in New York specialising in the global commodity export sector with a focus on the emerging markets.

Is this the right time to be introducing high deposit accounts?  Has the recession passed? Is there money floating around?

The financial markets are showing the initial signs of economic recovery in the USand in the main European economies. While these economies are not out of the woods yet, over the past 3 months, we have seen investor confidence creeping back into the markets and corporate profits improving. While these results have not yet translated themselves into significant changes in the employment figures and consumer demand, the general feeling is one of optimism that investors have overcome the fear of a double dip, and therefore there is now a level of stability and a positive feeling about recovery in the main global economies.

 During the financial crises triggered by the collapse of Lehman Brothers in 2008, most investors scrambled to get out of risky and illiquid assets causing a major run on the markets. Most investors moved most of what they could recover from their investments from financial assets into cash-deposits with banks. Money has been lying around in bank accounts earning very low interest rates, while waiting for the right opportunity to get back into the market. That is the primary reason why practically every corporate bond issue and Malta Government Stock release in the local market has been oversubscribed. It is quite clear therefore that there is investor interest in capital guaranteed instruments earning a superior rate of interest.
 
Time deposits that offer an interest rate that compares well with the return on bonds are certainly very attractive to investors, because the principle value of a bank deposit does not change, while the price of a bond fluctuates. In periods of rising inflation, base rates in general rise as a result of government intervention, and in Malta’s case, the European Central Bank intervenes to head off inflation. In the current climate the Central Bankers are already hinting at potential inflationary factors and possible ECB intervention to head off inflation by increasing the base rate later this year. Any such move will impact bond prices, while the principal on bank deposits is not affected.  

What are the differences between IIG and a high street bank?

IIG Bank was licensed in March 2010 and forms part of a group based in New Yorkthat has been in operation since 1994. At IIG Bank we allow our depositing clients the opportunity to customise the structure of their accounts while we pay a premium rate of interest for any term that customers wish to tie up money for. We create relationships with our customers whereby they can influence the way the account operates to meet their specific requirements. We want the customer to understand exactly what we offer and we make an effort to eliminate any hidden expenses. We do not charge any maintenance fees and any incoming money transfers are processed free of change. Through such personalised service we seek to create lasting relationships with our clients and not just see them as numbers.

What services do IIG offer?

In this initial phase of our development, we are concentrating on savings and deposit products for the average to high net worth individual and corporate investors. We have a range of interesting offers. Some are basic accounts paying a superior rate of interest, while from time to time we are promoting special offers that are more attractive because they are built to meet a particular opportunity in the market. For example, we are now launching a new time deposit account for 3 years that starts with an attractive minimum fixed rate of 4% per annum for EUR ($ - 3.25% & £ - 3.5%) with the possibility of the interest rate going up to 6% per annum, should the base rate for the currency increase during the term of the deposit. This offer is attractive now because interest rates are at an all time low and investors may be expecting rates to rise. Should the ECB, US and UKraise their base rates, the deposit rate on this offer will take full effect of any such increase of the base rate from that time onwards up to a maximum interest rate payable of 6% per annum. Interest will be paid every quarter to make it attractive to persons who wish to supplement their income while one can also add to the deposit during the first 12 months of the 3 year term. To support its depositors’ requirements, the Bank offers international money transfers and is launching internet banking services.

Who is behind IIG?

IIG Bank is an affiliate of the International Investment Group LLC, an established global trade finance manager based in New Yorkspecialising in the global commodity export sector with a focus on the emerging markets of Latin America. The International Investment Group LLC was established in 1994 and is registered with the Securities Exchange Commission (SEC) as a Registered Investment Advisor. Apart from its base in central Manhattan, New York, the Group also has local presence in Argentina, Brazil, Colombia, Ecuador, Chileand Peru. The success of the Group is attributed to the collective talent of its professional staff. In addition, IIG has a network of advisors and international contacts, who provide insight into local market conditions and enable the Group to capitalise on opportunities.

 IIG has been open for 12 months in Malta, what makes the bank different to the raft of new banks that have opened in the past 5 years?

 The most distinguishing factor with IIG Bank is that it forms part of a group that has been a trade finance lender for more than 15 years. The Bank that is now solidly established in Maltawill be following the same strategy applying the same principles that have been successfully employed within the Group. It is perhaps this certainty in strategy and the ability to tap into existing resources and expertise within the Group that makes a difference. Going forward, we want our customers to associate IIG Bank with relationship-based boutique banking services.