PwC Malta has recently announced the appointment of Michael Formosa, Chris Mifsud Bonnici and
Andrew Schembri as Partners within the Assurance, Tax and Advisory service lines respectively. These
admissions have taken effect as of 1 January 2024. All of the appointed individuals bring with them
years of professional experience and expertise gathered from participating in and leading both local
and international projects.
“I am really proud to welcome three valued professionals to our growing team of partners. The more
our firm grows, and business becomes more complex, the more important it becomes to empower hard
working individuals to continue taking the lead. I truly believe that Michael, Chris and Andrew will
contribute greatly to the success of PwC Malta. They are fully equipped to support our clients with
addressing global and local challenges while ensuring that they do so with integrity, objectivity,
professional confidence, and due care to build trust within the firm and in society and solve important
problems,” remarked David Valenzia, Territory Senior Partner at PwC Malta.
Furthermore, during the 2023 PwC Annual Conference held on 22 December, the outstanding career
of Joseph Camilleri was celebrated in view of his retirement from the firm. He joined the firm back in
1981 as a student trainee Chartered Accountant. His career was marked by excellence and dedication,
and he joined the Partnership in 1994. In 2019, he became the head of PwC Malta’s Advisory practice
that provides deals, consulting and digital services to an extensive portfolio of public and private sector
clients.
“It has been a pleasure being on this journey at PwC Malta with an excellent professional like Joe.
Throughout his career he has led, mentored and contributed greatly in building the strong local
presence of PwC Malta. In the name of all Partners and staff at PwC Malta, I wish him a wonderful,
well-deserved retirement,” concluded David.
Meet the new Partners
Michael is the latest partner within the Assurance line of service at PwC Malta. He joined the firm in
2007, after obtaining a Bachelor of Honours Accountancy degree from the University of Malta.
Throughout the 16 years of audit experience at PwC Malta he serviced a variety of high-profile clients,
including a number of listed entities, within the Banking, Insurance, Telecommunications, Real-estate
and Local family industries. He has also led a number of advisory engagements for public institutions.
Michael complemented his audit experience at the Banking & Capital Markets unit at PwC New York
and participated in a number of international PwC network quality assurance assignments.
Chris joins the Partnership as part of the Tax Service line, where he helps drive the firm’s governance,
risk and compliance offering. He has a keen interest in regulatory trends and innovation, and is
focusing on digital finance and ESG/sustainable finance related initiatives. He is experienced in
advising asset management and other regulated businesses on tax, structuring and regulatory matters.
He joined PwC Malta in 2013 after three years with PwC Legal LLP in London and is a dual Maltese
and English qualified lawyer. He specialised in International Commercial Law at Kings’ College,
London and is an associate of the Association of Chartered Certified Accountants (ACCA).
Andrew is a new partner within the Digital Services team at PwC Malta, with experience in digital
consulting and a specialised focus in Information Security Management. He joined the Advisory line of
service at PwC Malta in 2011 following the completion of a Bachelor of Accountancy (Hons.) degree
from the University of Malta. Throughout his career, Andrew has demonstrated a deep understanding
of the intersection between technology and risk management, especially as it relates to businesses
operating in regulated industries such as Banking, Gaming, Insurance and Telecommunications.
Between 2018 and 2021, he also spent 2.5 years working with PwC US in the San Francisco Bay Area
where he had the opportunity to work with leading global technology, e-commerce and semiconductor
companies.
Author: Mel Chamber
Atlas Insurance PCC obtains UK Branch and Life Reinsurance Licenses
Atlas Insurance PCC, a leading insurer in Malta and Protected Cell Company (PCC) in the EU, proudly announces two significant milestones. The company has successfully obtained authorisation for its UK branch and extended its non-life insurance and reinsurance licenses to encompass life reinsurance.
Having been active in the UK market since 2010, the UK branch authorisation ensures continuity for existing cells to continue writing UK risks post-Brexit and reaffirms Atlas Insurance PCC’s commitment to its UK partners.
The PCC’s UK branch uniquely enables companies and insurance intermediaries with UK risks or customers to set up their own protected cells offering insurance directly to their customers or insuring their own UK risks, reducing the barriers to entry to retaining insurance risk and accessing the lower-cost reinsurance market.
Cells hosted by Atlas Insurance PCC can write non-life insurance risks directly across both the European Economic Area (EEA) and UK markets and reinsure both life and non-life risks, marking a significant expansion in the range of services offered.
With the license extension to include life reinsurance, Atlas is responding directly to customer demand, showcasing its dedication to meeting client needs and expanding its range of services. Atlas has licenced its first cell reinsuring consumer products with non-life and life benefits. The licence opens up other opportunities, such as in employee benefits programmes that reinsure group life business for the cell owners’ groups.
Atlas Insurance PCC has always been at the forefront of innovation in EU-based insurance protected cells. It holds the distinction of being the world’s first traditional insurer to convert to a protected cell company.
“Our UK branch marks our first physical branch outside Malta, an exciting milestone as we begin celebrating our centenary,” said Matthew von Brockdorff, CEO of Atlas. “These advancements are a testament to our commitment to innovation and responding to emerging needs of our international customers and partners.”
Michael Whitfield, Head of UK Branch for Atlas, shared “The authorisation of our UK branch reinforces our unique position as both a traditional insurer in Malta and a host for cells writing consumer and captive insurance in the EU and UK. This expansion demonstrates our team’s dedication and expertise in navigating complex regulatory environments.”
Ian-Edward Stafrace, Chief Strategy Officer at Atlas and head of its international business, added, “Our extended reach into the UK market and the inclusion of life reinsurance in our portfolio positions us to serve our clients even better. As an independent PCC host, we are also extending the win-win opportunities for global insurance and captive management companies and consultancies and their customers, whether for retail insurance or captive risk financing.”
Atlas Insurance PCC’s commitment to innovation and excellence has solidified its reputation as a leader in the insurance industry. With its recent expansions and the continued drive to serve its clients better, the company is poised for even greater success in the future.
The Malta Chamber and BNF Bank p.l.c Renew Bronze Collaboration Agreement
The Malta Chamber of Commerce, Enterprise and Industry and BNF Bank p.l.c have renewed their Bronze Collaboration Agreement with the aim of supporting The Malta Chamber’s Entrepreneurship and Family Business Committee.
With the support and capabilities provided by BNF Bank, this committee is poised to enhance its strength, fostering robust discussions in policy domains pertinent to family businesses. The overarching goal is to enhance the business landscape, ensuring the efficient distribution of crucial information to key stakeholders. Collaboratively, both entities will establish frameworks to address issues unique to family businesses, develop tangible recommendations for the annual national budget concerning family enterprises, and raise awareness about the advantages associated with a thriving presence of family businesses within the country.
“Cognisant of the important legacy in the sphere of Malta’s commercial development, family businesses have always been at the core of The Malta Chamber’s mission. It is with pride and honour that we renew our partnership with BNF Bank. Over the years, our collaboration has been dedicated to fostering the prosperity of family businesses in our economy by delivering essential resources through workshops and seminars,” noted Chris Vassallo Cesareo, The Malta Chamber President, ahead of the signing.
“For the Bank, renewing our support for The Malta Chamber is also a continuation of our support to family businesses. In this regard, we are very much aligned with The Malta Chamber, in providing guidance for family businesses as they navigate changing regulation, succession planning, economic challenges and business opportunities. We firmly believe that family businesses are the country’s backbone, and supporting them means supporting our country’s continued development,” said BNF Bank plc Chief Executive Officer David Power.
The Bronze Collaboration Agreement was signed by Christopher Vassallo Cesareo, Nick Xuereb and Dr Marthese Portelli as President, Deputy President and CEO of The Malta Chamber, respectively, and George Debono and Melvin Pellicano, CCO and Head of Business Development at BNF Bank, respectively.
The Malta Chamber urges Government to focus on systematic measures against inflation and revoke price fixing
The Malta Chamber of Commerce, Enterprise and Industry reiterates its steadfast stance that the control and reduction of inflation should be the topmost priority to safeguard the competitiveness of the Maltese economy. Fiscal policies that fuel inflation by stimulating demand, coupled with a lack of preparedness for the impact of EU policies impacting transportation costs are exacerbating the situation.
As businesses continue to battle to mitigate their rising costs and stay competitive whilst consumers become more selective in their choice of purchase in view of the rising cost of living, government is planning to intervene by means of price fixing on food as a means to mitigate inflation. The Malta Chamber firmly asserts its position against such direct intervention in the market, not only as a matter of principle but also because such intervention will only stifle competition to the detriment of all. Rather than protecting the consumer, such interventions direct the consumer to purchase a highly restrictive basket of food items selected by Government. This approach, which seems more cosmetic than effective, is essentially masking and not addressing the situation. The extent to which it can be successful in reducing the prices of such items is dubious because several retail businesses already apply substantial discounts to basic items as a matter of normal business. Also, this will make other items which may be superior in quality and nutritional value relatively more expensive, thereby encouraging people to shift their consumption towards inferior products.
The approach chosen by Government to try to control inflation of food prices is regressive and reminiscent of decades ago when consumer protection came at the expense of consumer choice, and Government controlled the market instead of promoting competition through proper monitoring and regulation, and instead of allowing the market to develop and operators to openly compete according to consumer preferences.
Unwise attempts and ineffectiveness
The Malta Chamber argues that price fixing is not a viable solution to the complex issue of inflation. Such a move will not yield the desired systematic control of increasing costs because it does not address the root causes of inflation.
The inflation in imported food prices that we have seen in Malta, apart from the growing logistical costs being an island economy and spiralling wage growth as a result of the tight labour market, is similar to what has been registered in other European countries where it was fuelled largely by higher energy costs and, even more importantly in the case of food items, by dramatic increases in basic food ingredients resulting from the war in Ukraine and poor crop yields in many parts of the world due to climate change and extreme weather events. The local subsidisation of energy and wheat does not shield us from these global impacts on imported food prices.
While some countries have toyed with similar ideas, these have been highly questionable. Such interventions fail to address the core issues and merely act as smokescreens, deflecting attention from the real economic challenges at stake.
Collaboration Solution and Government Engagement
While the local market is relatively small, there is a large variety of brands imported by a number of companies that are well equipped to handle the distribution of food items in a cost-effective way, apart from the ever-growing number of retail outlets. There is active competition between brands and retail outlets, and the Malta Competition and Consumer Affairs Authority (MCCAA) keeps a close eye on concentration to ensure that the market functions well. There are things that Government could have done to improve transparency for the consumer without meddling into price setting through the proper channels for addressing market-related issues. Responsibility for such matters lies within the remit of the MCCAA. The Malta Chamber urges MCCAA to fulfill its role effectively and transparently and ensure that market abuse, if any, is identified and addressed promptly.
The way Government negotiated the scheme is of particular concern. Market operators were contacted individually by Government and prodded into complying. The Malta Chamber immediately expressed its concerns to Government. The Malta Chamber is always open to discussing effective solutions and supportive of sensible policies. The fact that Government did not seek to find a more effective remedy with the legitimate representatives of business, or within the national forum for social dialogue, which is MCESD, is highly disappointing. The Malta Chamber insists that a unified approach will yield more effective and sustainable solutions and calls on the government to revoke this decision and start the discussion at MCESD level.
The Malta Chamber concludes by reaffirming its commitment to supporting the authorities in addressing any identified market abuse, thereby ensuring a level playing field and fully functioning competitive environment for the benefit of both the business community and consumers at large. The Malta Chamber calls for a united front in tackling such economic and social challenges and highlights the importance of collaboration between Government and the business community to foster sustainable economic growth along with the related social considerations.
The Malta Chamber holds info session on the new legislation for temping agencies
The Malta Chamber of Commerce, Enterprise and Industry kicked off its 2024 calendar of events with an info session aiming at shedding light on the new legislation for temping agencies.
With over 100 attendees, the informative event outlined how individuals, companies or agencies engaging temporary workers will need to first obtain a license issued by authorities before being allowed to operate.
In her opening remarks, Dr Marthese Portelli, The Malta Chamber CEO, emphasised that in light of this new regulation, The Malta Chamber is once again being proactive to ensure that this legislation is adequate, proper, fair and one that respects and protects the potential employees and the employers from possible abuse. “The law should possess the flexibility and adaptability to undergo swift amendments and adjustments within a short timeframe. This ensures its ability to promptly address any identified gaps or emerging issues, while also staying in tune with the evolving trends of the times,” noted Dr Portelli.
During a fireside chat, Diane Vella Muscat, Director General at DIER said that “these regulations will be beneficial to all parties involved to ensure a better-quality standard in such operations. These Regulations will ensure that the employment conditions are according to employment law, the user undertaking will have the guarantee that the agency is licenced and licenced agencies will have peace of mind that action would be taken against agencies which are found to be operating irregularly.”
In his presentation on the main takeaways of the published regulations, Dr Matthew Brincat, Partner (Employment and Pensions) at Ganado Advocates (Bronze Sponsors of The Malta Chamber), said “Over the last few years, the supply of labour as a service has become a reality that is here to stay. The regulations published at the end of last year raise the bar so that entities that want to provide such a service are properly licenced and may be adequately monitored.”
In a video intervention, Col. Mark Mallia, Identity Malta CEO, highlighted that it is imperative that we emphasise the critical need of employing competent and skilled foreign workers, rather than going after numbers.
Lawrence Zammit, Chairperson of The Malta Chamber Employment Agencies Business Section presented the ‘Code of Good Practice’, a framework for self-regulation for those engaged in employment services. “This framework advocates high standards of ethical behaviour in conjunction with relevant legislation and addresses several key elements including; keeping an employer register, operating job boards, temping services and recruitment consultancy services, amongst others,” highlighted Zammit.
Ing. Ruben Cuschieri, Council Member and representative of The Malta Chamber in the Employment Relations Board, in his concluding remarks stated that The Malta Chamber will continue to give its input and commitment on this board to ensure that all the interests of the business community are being observed.
2023 sees 151 BOV employees graduate
Celebrating our direct investment in our people and the quality of service offered to our customers
Bank of Valletta celebrated with its people during a formal Graduation event that was attended by the Bank’s senior management, including Chairman Dr Gordon Cordina and CEO Kenneth Farrugia. Aptly named Proud of Our People, the event was the culmination of a year of online and in-person training programmes driven by the Bank’s Learning and Development Centre. The evening saw 151 employees graduating in a broad spectrum of awards and qualifications, all of which are recognized by the Malta Further & Higher Education Authority and are qualified under the Maltese Qualified Framework in MQF Levels 5 and 6.
In his brief opening address, Dr Gordon Cordina expressed his delight at witnessing the breath of learning opportunities made available by the Bank, both in-person as well as through the self-learning platform, and the keen response of its people, with several courses being overbooked within days or even hours of being launched. He went on to explain that “providing training is only one important facet of our people’s development. There is also a collective responsibility among senior management and team leads to ensure that our people are finding their jobs challenging and rewarding, whilst we approach learning with humility, grateful for the opportunities to improve ourselves and generous in sharing our knowledge with our peers.”
Speaking during the event, Kenneth Farrugia explained that the Bank recognizes the sacrifice put in by its people to pursue their studies while working full-time. In addition to the 1,100 employees who attended in-house courses, over 700 employees have attended or are attending external courses and reading for different qualifications during 2023. “As a Bank that aspires to be the Employer of Choice, we understand that our biggest asset is human capital. In a bid to truly be a learning organisation, we choose to invest in our people, through various initiatives including study grants, with 2023 seeing over 100 applications approved.” In addition, the Bank supports its people through both study loans and study leave. Referring to the Bank’s customer-driven strategy, Mr Farrugia emphasized that the Bank’s strategy hinges on its people, who are the fulcrum of its drive in various fields, including business, risk management and governance, as well as its operations and support functions.”
Ray Debattista, Chief People and Culture Officer, also addressed the new graduates, outlining the different initiatives undertaken by the Bank to strengthen its position as the Employer of Choice, through investment in technology as this year saw the Bank launching a new interactive online learning platform, and designing new courses in response to market needs, including a brand new onboarding programme. He also mentioned the Bank’s suite of benefits, both financial such as the Bank’s voluntary occupational pension scheme and non-financial like the different family-friendly measures in place, and the Bank’s Brain Waves programme that encourages people from across the organisation to put forward their recommendations and rewards them. He concluded by saying, “As an organisation, we have changed and we shall continue to change and evolve because we need to remain relevant, leaders and catalyst of change.” He reiterated his belief that the Bank’s future success is underpinned by the hundreds of people who continue to drive change and improve themselves and the service offering to our customers.”
During the brief event, every employee present received a commemorative certificate. This was followed by a toast led by Dr Tania Camilleri from the Learning & Development team. A small reception for graduates and management followed.
Untangling EU Climate and Energy Policy
MBB publication offers overview of EU Fit For 55 outcomes
The Malta Business Bureau has published a detailed report on the outcomes of the negotiations on the Fit For 55 package. The latter includes a set of EU proposals issued in 2021 by the European Commission to accelerate the bloc’s efforts to achieve their ambitious climate targets. The proposals were put forward in line with the EU Green Deal.
The package aims to introduce several new policies, while reforming existing ones, with the aim of reducing greenhouse gas emissions by at least 55% below 1990 levels by 2030. Measures tackle various high emitting sectors and industries, such as energy production, transport, buildings, and industry.
New rules are poised to bring significant changes to the way businesses operate. Understanding these changes will be crucial for businesses to adapt their strategies and ensure long-term sustainability. To this end, the MBB compiled a comprehensive report to supply valuable insights into the implications for businesses.
Commenting on the launch, MBB President Alison Mizzi said “The Fit For 55 package will bring about changes for businesses to meet our collective climate targets. In the last years, businesses have experienced a barrage of new legislation which is difficult to keep track of, especially for SMEs. We trust that this publication will serve as a useful tool to decipher the complex web of EU climate policies and identify the potential impact of the new legislation in the coming years.”
The publication provides an overview of new rules concerning energy efficiency, renewable energy, sustainable fuels, transport, energy taxation, and carbon pricing.
On energy, the focus is placed on increasing the share of renewable production and significantly increasing energy efficiency. Likewise, building owners and industry will be expected to gradually increase the energy efficiency of their operations through, for instance, more efficient equipment and building renovation, while increasing investment in greener energy onsite.
Aviation and maritime operators will be expected to gradually shift towards the use of sustainable fuels and embrace greener practices such as connecting to onshore power supplies and only carrying the fuel required to complete a trip to avoid excess weight.
The sale of new Internal Combustion Engine (ICE) cars shall be banned as from 2035 to reduce the environmental impact of road transport. At the same time, the use of carbon-based fuels across various sectors will be gradually disincentivized through higher taxes and other costs.
Significant challenges and opportunities arise from the Fit For 55 package legislation. While many businesses are in favour of a stronger green agenda, concerns over competitiveness, rising costs, and the impact on small peripheral member states, have also been put forward.
The new rules will be gradually implemented over the next years. For more detailed information and to view the full publication visit www.mbb.org.mt.
The Malta Business Bureau is the EU business advisory organisation of The Malta Chamber and The Malta Hotels and Restaurants Association. It is also a partner of the Enterprise Europe Network.
New Action Plan Aims to Strengthen Malta’s R&I in Energy and Climate Efforts
The Energy & Water Agency, The Malta Chamber, and The Malta College of Arts, Science & Technology (MCAST), as part of the Mediterranean Island Cleantech Innovation Ecosystem (MICIE) project, have co-published a Research & Innovation Action Plan for Malta to help guide towards better coordination and growth of R&I in the face of local climate and energy challenges. This plan has been developed within the context of this project and shall now seek financial support and endorsement from the Maltese government. The MICIE Project was created with the aim of strengthening the contribution of R&I in achieving the climate and energy targets of Malta and Cyprus as defined in their National Energy and Climate Plans (NECP).
NECPs are long-term plans that outline how EU member states intend to meet the energy and climate targets for 2030. The plans cover areas such as energy efficiency, renewables, greenhouse gas emissions reductions, interconnections, and R&I. NECPs provide a level of planning that will ease public and private investment and require coordination across all government departments. An updated NECP for Malta is expected to be submitted in 2024.
The Malta R&I Action Plan presented today proposes three cross-cutting actions which were identified as a result of several stakeholder engagement workshops carried out on the theme of Energy and Climate. Participating stakeholders ranged from policy makers and implementors, civil society groups, education and research institutions, funding providers, businesses, and the public.
The first action being presented is the identification of R&I testing facilities. This involves the following core tasks; identifying suitable locations for onshore and offshore facilities for the testing of renewable technologies, assessing the necessary policy framework for the creation of these facilities, and evaluating the need for a regulatory sandbox. The latter is being proposed to be carried out jointly with Cyprus to tackle a common deficit and promote international collaboration within R&I.
The second action developed through the stakeholder workshops is the proposal for the development of an open science database. The first task under this action is to identify and engage potential data providers and users to identify database requirements, including hosting and infrastructure requirements. It is likewise considered necessary to study what structure for data warehousing is best suited for an open science database and any frameworks required for data sharing, integration, and maintenance. This will then be followed by the actual design and development of the database.
Strengthening the local researcher workforce is the final action being proposed within the Action Plan. This action primarily involves the strengthening of collaboration between public, academia, government and industry through dedicated events promoting R&I in energy and climate, and the continuous assessment and improvement of existing schemes. The action also considers bolstering the local researcher workforce through collaborative programmes with other EU member states, supporting younger researchers in their studies, and assessing mechanisms to attract international researchers to collaborate locally on priority projects for Malta were also identified as key tasks under this action.
This MICIE project is funded by the Horizon Europe Framework Programme for Research and Innovation of the EU. It is a collaboration between the Cyprus Institute of Technology, the Cyprus Energy Agency, EIT Climate-KIC, the Deputy Ministry of Research, Innovation, and Digital Policy of Cyprus, the Cyprus Employers and Industrialists Federation, the Malta College of Arts, Science & Technology, the Energy & Water Agency, and The Malta Chamber.
For more information on the Action Plan and Guidebook please visit the project website.
BOV sells portfolio of non-performing loans
Bank continues to strengthen its capital and liquidity buffers
Bank of Valletta today announced that, following a strategic review of its book of non-performing loans, it has sold a portfolio of non-performing loans (the “Portfolio”) for a consideration of €26 million with a view to strengthening the Bank’s capital and liquidity buffers, and to ensuring that the Bank’s resources are focused on servicing loans with a better prospect of recoverability.
Supported by external advisors, the Bank selected the Portfolio using pre-defined criteria. The Portfolio is comprised of 707 non-performing loans (“NPLs”) across 245 borrowers, the majority of which have been granted commercial loans to finance business activities across a number of different industries. The Portfolio also includes personal loans, credit card loans, home loans, encroached savings and current accounts and other debts. The Portfolio is significantly biased towards loans and facilities that have been in default for a long period of time, with 90% of the Portfolio comprised of loans and facilities that have been in default for 5 years or longer.
The primary purpose of the transaction is to generate income from NPLs which may have either been completely written off or provided for, in large part, in previous years.
The current net book value of the Portfolio reported in the Bank’s balance sheet is in the region of €5 million. In this regard, the transaction is expected to have a positive impact of approximately €18 million on the Bank’s profitability for financial year 2023, representing the difference between the accumulated expected credit loss (provisions) and the actual realised loss following the transaction. The amount of €18 million realised in 2023 is net of a provision of €2 million representing potential liabilities arising from the acquirer’s right to make a claim for compensation under certain specific circumstances in terms of the assignment agreement.
The transaction will also improve the Bank’s NPL-ratio in line with regulatory requirements, aligning itself better to peer European banks. In addition, the transaction is expected to render other benefits to the Bank, such as an improvement in the asset quality of the Bank’s credit portfolio as well as removing the need for further provisioning against these debts. The transaction will also improve the Bank’s operational efficiency due to a release of resources which are currently dedicated to lengthy debt collection processes, court proceedings and the ongoing management of the collateral held by the Bank, including their eventual disposal.
The Portfolio was sold by way of assignment to a Malta-registered public limited liability company established as a securitisation cell company in terms of the Securitisation Cell Companies Regulations (Subsidiary Legislation 386.16, laws of Malta). As a result of the transaction, the acquirer has replaced the Bank as creditor in respect of the relevant NPLs.