The small Mediterranean country’s reliance on tourism-related activities led pre-tax profits to tumble last year at leading lenders.
The banking sector in Malta is heavily exposed to tourism, which has created significant challenges during the Covid-19 pandemic.
The sector has also been under fire over weaknesses in financial regulation and anti-money-laundering supervision, and banks are being forced to strengthen internal functions as regulatory actions are stepped up.
Pre-tax profits tumbled in 2020 at leading Maltese lenders. Bank of Valletta, for example, saw profits plummet 81% year-on-year to $18m, while Medirect Bank plunged to a $93m loss, according to The Banker Database.
HSBC Bank Malta suffered a 63% fall in year-on-year pre-tax profits, dropping to $13m in 2020, while APS Bank saw a 35% drop to $20m.
The Central Bank of Malta expects gross domestic product to grow by 4.9% in 2021 and by 5.4% in 2022, although much will depend on how quickly the country returns to pre-Covid 19 levels of tourism activity.
Trends identified using The Banker Database, an online database providing comprehensive financial data and insight for 4000 of the world's leading banks in 190 countries. Contact us.
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