No financial crimes committed in problematic cases flagged by FIAU, APS Bank CEO says

APS Bank CEO Marcel Cassar addresses FIAU fine over regulatory breaches says report highlighted weaknesses that have since been addressed but no crimes were committed

APS Bank is not contesting a fine imposed by the FIAU for money laundering regulatory breaches
APS Bank is not contesting a fine imposed by the FIAU for money laundering regulatory breaches

None of the cases flagged by the financial crime watchdog when fining APS Bank for regulatory breaches resulted in instances of financial crime, the bank’s CEO said.

Marcel Cassar was briefing the market on Friday in the wake of the €228,000 fine imposed by the FIAU over breaches of money laundering rules following a compliance visit in 2020.

The bank, which has since strengthened its anti-money laundering structures and procedures, is not appealing the fine.

Cassar gave an unequivocal ‘no’ when asked by MaltaToday whether any of the sample cases flagged as problematic by the FIAU resulted in cases of financial crime.

“None of the individual cases flagged by the FIAU resulted in financial crime and hence the bank did not have to terminate its relationship with the clients. The FIAU findings indicated potential weaknesses in our systems that could lead to a higher risk of money laundering,” Cassar said.

He added the bank does terminate relationships when clients do not provide the information requested from them by the bank, which retains a risk-averse philosophy.

The FIAU identified numerous deficiencies in the bank’s procedures. One customer file contained shortcomings on the compilation of beneficial owners’ source of wealth, while in another case APS did not collect sufficient information on the expected source of funds at on-boarding stage, where a declared net monthly remuneration of approximately €5,000 was insufficient to substantiate the estimated annual deposits of over €5 million.

However, the FIAU also acknowledged APS’s ongoing commitment towards enhancing and updating its AML/CFT systems and processes, and praised the dedication displayed by the bank’s top management in their fight against money laundering and the financing of terrorism.

Cassar said the bank was holding the market briefing in the interest of transparency.

Responding to a shareholder’s question over the impact the fine will have on the bank’s profitability, Cassar said the size of the fine was not a matter of concern.

“The size of the fine is one day’s operating income for the bank and thus does not require any adjustments to our accounts. But the significance of the fine is relevant to us, which is why we have strengthened our systems and increased resources to prevent financial crime and ensure compliance with anti-money laundering rules,” Cassar said.

APS issued shares to the public last year, leading to its listing on the Malta Stock Exchange. The archdiocese remains the majority shareholder in the bank, which is one of the oldest on the islands.