Bank of Valletta’s decision to shed big clients in the gaming industry was hasty and poorly communicated but a proper de-risking exercise could have benefits to Malta’s economy in the long run, according to the CEO of Malta Enterprise.
“There is short term pain in a de-risking process, which in the longer term will create stronger and safer banks for the benefit of Malta’s economy,” Kurt Farrugia told Lovin Malta.
The former spokesman of Joseph Muscat underlined that the de-risking process was being pushed by the local and European regulators. But he said BOV’s decision, which is part of a de-risking strategy, “appears to be hasty and wasn’t communicated well to its clients”.
“As a result, this is creating confusion in the business community which may affect the economy.”
Asked to react to the fact that some companies – including locally-owned ones like YoBetIt – were having their credit cards shut down in 15 days and their accounts closed within two months, he said: “My advice for companies hit by BOV’s actions is to seek alternative banking arrangements in Malta. In the meantime, Malta Enterprise will give its full support to businesses being affected by BOV’s decision.”
Farrugia added that foreign direct investment in Malta was still growing from strength to strength.
“Companies which employ hundreds of workers are being set up as we speak and there is huge interest from foreign companies to set up operations here because of Malta’s business friendly approach and its sophisticated ecosystem.”
Meanwhile, YoBetIt CEO Nikolai Livori has warned the bank’s actions would have serious consequences for Malta’s economy.
“Malta has been the iGaming hub in Europe for long years, but a move like this will shake the whole industry.
We have seen a lot of job cuts in the iGaming world during the past few weeks. This impossibility to hold funds locally will force the whole industry out eventually.
We need to remember that iGaming makes a large part of the country’s GDP, so shutting more doors for gaming companies is suicidal because it will lead to mass redundancies consequently affecting the property market as well, mainly the rental one.”