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Malta’s financial services reputation under fire

Customers and businesses threaten to turn their backs on the island amid Satabank sanctions


Malta’s reputation as an international financial centre is under threat with business and retail banking clients threatening to boycott the Mediterranean island after the regulator froze accounts at Satabank.

Customers have been unable to access their accounts since last month when the Malta Financial Services Authority (MFSA) froze them after an inspection found shortcomings in the bank’s anti-money laundering procedures.

Lack of customer care

The General Retailers and Traders Union (GRTU), Malta’s national organisation of independent businesses, has complained about the “complete” lack of customer care.

“Businesses are being given close to no information outside the bank’s doorstep. Responsibility must be taken for the additional damage that is being created.

“Apart from the fact that this is hitting Malta’s reputation very hard and many businesses that have come to invest in Malta have told GRTU that they will not look at Malta ever again, there is a level of unfairness where the good has been castigated with the bad.”

A member of the Facebook group ‘Victims of Sata bank’ commented: “Goodbye Malta, over and out”, after his accountant told him the bank will release the funds over “the next few months”.

Reputation damage

Similarly, other Maltese banks are showing signs of concerns over the lack of confidence people have shown towards Malta’s banks.

Addressing these concerns, the Malta Bankers’ Association said: “The requirement to undertake customer due diligence and monitor account conduct is a basic precept in international and local regulation, irrespective of the nationality of the customer.

“Where these responsibilities are not carried out, the consequences can be serious, far-reaching and banks may risk having their activities curtailed or terminated.

“This has regrettably been the case in a number of instances locally, including the latest Satabank developments, which has caused damage to Malta’s reputation as a leading jurisdiction for financial services.”

Enough funds

On 12 November, sources within the MFSA revealed to newspaper the Times of Malta that Satabank has enough funds to pay back all of its 5,000 depositors. However, experts would need to finish going through the 12,000 accounts first.

Satabank holds around €300m (£261.9m, $339.9m) in customer deposits, and even though efforts to release those funds as soon as possible have been made, no set date has been given to customers yet.

EY (formerly Ernst and Young) – which was appointed to administer the bank’s assets – and the financial watchdog are currently assessing which clients are most at risk of suffering immediate consequences due to having their accounts blocked.


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