Deputy Prime Minister meets with bankers to discuss Malta Development Bank

After receiving the go-ahead from the European Commission for the establishment of the Malta Development Bank, Deputy Prime Minister Louis Grech today met with members of the Malta Bankers’ Association (MBA) to discuss with them the role that private banks will play in the new Bank’s operations.

Representatives from APS Bank, Bank of Valletta, HSBC Bank, Lombard Bank, Medbank/Medcorp and MBA were present for the meeting. They welcomed the establishment of the Bank and agreed that it would be a very useful institution complementing and supplementing the lending activities of the private banks. 

The Malta Development Bank is intended to make financing available to businesses when this is not obtained through financial institutions.

Rene Saliba, chairman of the Working Group appointed by the Deputy Prime Minister, said that the Group had identified a financing gap of between €2.3 billion and €3.1 billion, which, if one included a large infrastructural project like the monorail or a light railway, this could easily reach €1.4 billion - €2.3 billion.  

Grech said that the MDB could give to small and medium-sized enterprises, whose financing gap was estimated at between €334 million and €602 million.   

The Bank is expected to have an authorised capital of €200 million, allowing it to leverage this to around €1 billion of loans in due course.  The initial paid-up capital is expected to be around €30 million, with further capital pay-ups depending on the growth of the Bank’s business.  

The Bank will be completely owned by the government and has already obtained the approval of the European Commission, after it was found to be in line with EU state aid rules.