Nemea banking licence withdrawal ‘no material impact’ on Malta’s financial system

An eventual withdrawal of the banking licence granted to Nemea Bank would not have “a material impact” on the Maltese financial system, the Central Bank of Malta said today.

On Friday, the Malta Financial Services Authority (MFSA) announced that it had asked the European Central Bank to withdraw Nemea’s banking licence. The online-only bank was placed under controllership earlier in 2016.

The bank was placed under the control of PricewaterhouseCoopers as a ‘competent person’ in April 2016 to ensure the proper protection of depositors and bank’s clients after the ECB flagged “serious regulatory concerns” inside the bank.

The small international bank, authorised to operate as a credit institution in September 2008, had been gradually tapping the retail deposit market since 2011 with total assets currently estimated at less than €60 million.

“It has minimal links with the domestic economy, and in the eventuality that the Bank’s licence is withdrawn such an event would not have a material impact on the Maltese financial system. The banking sector in Malta continues to be sound and remains resilient despite these developments which are exclusively specific to this Bank,” the Central Bank of Malta said.

“The decisive and timely measures taken by the regulator demonstrate the determination of the competent authorities to protect depositors and uphold good governance in financial institutions to safeguard the integrity and reputation of Malta’s financial system.”