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Author: Mel Chamber

Record 2024 results for HSBC Malta

Posted on by Mel Chamber

Highest dividend in the last decade thanks to robust business performance

2024 Results – Highlights

In 2024, the bank achieved record financial results due to revenue growth, recoveries on expected credit losses and focused investments. As a result, the bank is proud to report a profit before tax of €154.5m.

The bank’s strong capital generation enables it to recommend a dividend pay-out ratio of 51% of the reported profits for the year ended 31 December 2024. The final gross dividend will be of 12.0 cents per share (7.8cents per share net of tax). This together with an interim dividend of 10.0 cents paid on 17 September 2024, brings the total dividend for 2024 to 22.0 cents (14.3 cents net of tax), representing the highest dividend in the last decade.

Financial Performance 

  • Profits before tax of €154.5m for the year ended 31 December 2024, an increase of €20.6m or 15% over 2023.
  • Increase in profits driven by revenue growth across all revenue lines mainly due to the higher interest rate environment, increase in customer activity and higher insurance subsidiary results.  The credit quality of the loan portfolio continued to improve resulting in a significant release of expected credit losses. Operating costs increased mainly driven by investment in people, technology and real estate. 
  • Recommended final gross dividend of 12.0 cents per share (7.8 cents per share net of tax) which brings the total dividend for 2024 to 22.0 cents (14.3 cents net of tax).
  • Reported profit after tax attributable to shareholders of €100.1m for the year ended 31 December 2024, resulting in earnings per share of 27.8 cents, compared to 24.1 cents in the same period in 2023.
  • Return on equity of 17.5% compared to 17.1% for 2023.
  • Customer deposits increased by €16.8m to €6,158m at 31 December 2024 while net loans and advances to customers decreased by €210.7m to €2,873m compared to 31 December 2023.
  • Strong capital and liquidity ratios well above regulatory requirements.

Financial Performance

We delivered exceptional results driven by strong revenue growth across all our businesses and revenue lines. We experienced continued improvement in the credit quality of the loan portfolio resulting in a significant release of expected credit losses. The reported profit before tax for the year ended 31 December 2024 was €154.5m. This represents an increase of €20.6m or 15% compared to prior year. The reported profits include a notable item of €6.1m relating to the re-assessment of the tax estimate of the with-profit portfolio within the insurance subsidiary. 

Reported profit attributable to shareholders was €100.1m, resulting in earnings per share of 27.8 cents compared to 24.1 cents in the same period in 2023.

Net interest income increased by 5% to €206.1m compared to prior year due to the higher interest rate environment. While the ECB started to lower rates in June 2024, the average prevailing interest rates in 2024 were still higher than 2023.  The increase in net interest income is largely driven by higher interest on placement of excess liquidity, due to higher interest rates as well as higher average deposits balances held throughout the year. 

Net fee income increased by €1.4m to €20.9m compared to 2023. This was driven by an increase in lending and commitment fees as well as higher returns from our asset management subsidiary. We have reported growth in transaction banking and higher volumes of international payments.

Net trading income increased by 27% to €9.7m. As the leading international bank in the market, we grew volume of transactions and helped more clients to manage foreign exchange and interest rate risks. 

Operating costs for the year increased by 10% and amounted to €112.8m. The increase in expenses was mainly attributable to our investment in people, the IT infrastructure and real estate.  In 2024, we signed an ambitious and ground-breaking three-year collective agreement to energise our talent on customer service excellence. During the year, we also implemented a new mortgage system, made good progress on the roll-out of new ATMs and inaugurated our new headquarters, HSBC Hub, in Qormi. 

During the year, we reported a release of expected credit losses (‘ECLs’) of €14.6m, compared to a release of €4.6m in 2023. The 2024 release is across retail and commercial banking.  It is mainly driven by the recovery on wholesale non- performing loans, a release of retail provisions held for inflationary pressures which did not materialise, general improvement in the credit quality of the book as well as improved forward economic outlook.  We also saw an increase in recoveries of amounts written off in prior years, as we progressed claims and recoveries in a diligent manner. 

The effective tax rate was 35.2%. This translated into a tax expense of €54.4m, €7.3m higher than the expense for 2023. The increase in tax expense resulted mainly from increased profits.

HSBC Life Assurance (Malta) Ltd reported a profit before tax of €14.4m compared to a profit of €6.2m in 2023. The positive variance in profitability of €8.2m is mainly attributable to a re-assessment of the tax obligation estimate on the with-profit run off portfolio, which resulted in a one-off expense release of €6.1m. 2024 profits also include a reversal of losses on onerous insurance contracts of €1.3m booked in 2023. In 2023, a proportion of insurance contracts were loss making leading to the booking of losses on onerous contracts.  These losses were reversed in 2024 as the contracts became profitable mainly as a result of positive market movements. 

Financial Position and Capital

Net loans and advances to customers decreased by €210.7m to €2,873m. We continued to improve asset quality by reducing non-performing loans by 35% while retaining a prudent credit policy.

Customer deposits increased by €16.8m to €6,158m.  The increase was predominantly driven by an increase in retail deposits. While commercial deposits as at 31 December 2024 were at the same level as those reported as at 31 December 2023, we saw an increase in the average level of commercial deposits held throughout the year. The liquidity ratios remained well in excess of regulatory requirements.

The financial investments portfolio increased by 74% to €2,291m. In 2024, the bank continued to increase the size and duration of the structural hedges to reduce the sensitivity of banking net interest income to interest rate movement and stabilise future earnings. As a result, we managed to reduce the one-year interest sensitivity relating to a 100bps negative movement in rates from €24.5m to €18.1m.

The bank’s common equity tier 1 capital was 22.6% at 31 December 2024, compared to 20.6% at the end of 2023. The total capital ratio increased to 25.6% compared to 23.5% at 31 December 2023. The improvement in the capital ratios was driven by increased profits, higher revaluation reserves on our Hold-to-Collect and Sell investment portfolio and lower capital deductions for non-performing loans as a result of the improvement in credit quality. The bank maintained a strong capital base and is well in excess of the regulatory capital requirements.

The bank is determined to continue maintaining a strong capital base, whilst at the same time recognising the importance of dividends to our shareholders. In view of the strong results, the Board has recommended a dividend pay-out ratio of 51% on reported profits. The final proposed gross dividend will be 12.0 cents per share (7.8 cents per share net of tax) which brings the total dividend for 2024 to 22.0 cents (14.3 cents net of tax).  This is the highest annual dividend paid in the last decade. The final proposed dividend will be paid on 20 May 2025 to shareholders who are on the bank’s register of shareholders on 13 April 2025, subject to approval at the Annual General Meeting scheduled for 13 May 2025.

Geoffrey Fichte, Chief Executive Officer at HSBC Bank Malta p.l.c., said:

“I’m proud to report record 2024 annual results for HSBC Bank Malta p.l.c., representing the highest levels of revenue, profit, returns, dividends and investment in over a decade.  All of our business lines reported growth in revenues and customers in 2024.

“Thanks to the collaboration across all areas of our bank, we have introduced a range of innovative solutions for our customers, including a new mortgage system, upgrades to our card offerings, the launch of group life insurance policies for company employees and improvements to our digital platforms for both individuals and companies. We are replacing our entire ATM network, with half of ATMs already replaced to-date and the remainder set for completion by the end of 2025.

“We are proud to have been recognised as the Market Leader and Best Service Provider for Trade Finance in Malta, further demonstrating our strength and competitive advantage.  This award is a testament to the dedication and professionalism of our employees.

“Looking ahead, we remain focused on growing and improving our business to support the dynamic needs of our customers and the community, while delivering strong returns to shareholders.  We continue to invest in continuous improvements to make banking easier and simpler for our customers.

“I would like to take this opportunity to thank the Board of Directors and my colleagues for their dedication, whose hard work throughout 2024 helped us deliver record results, improved customer service and generate market-leading returns for our shareholders.  It is an honour for me to lead this successful company, and I would like to thank our customers for their business, trust and confidence.”

BOV commemorates international day of women and girls in science

Posted on by Mel Chamber

Bank of Valletta proudly commemorated the International Day of Women and Girls in Science, reaffirming its commitment to fostering a diverse and inclusive workplace where professional women with diverse academic backgrounds can thrive. As the financial sector evolves, with advancements in Data Science, Artificial Intelligence (AI) and Analytics shaping the financial world, BOV is positioning itself as Employer of Choice in Malta by offering exciting career opportunities in Science, Technology, Engineering & Mathematics (STEM).

Women Leading the Way in STEM at BOV

To commemorate this international day, the Bank celebrated the achievements of a number of employees who are taking the leading role in the Bank’s transformation journey. Several colleagues shared their experience with essential insights that serve as inspiration to other women wishing to take up roles in this important field.

Annalise Azzopardi, an MSc Statistics graduate, uses her analytical skills to transform complex data into valuable business insights. “I apply my statistical expertise to help the Bank make informed decisions, enhancing processes and optimising customer experiences. Logical thinking and problem-solving are at the heart of what I do.” Meanwhile, for Marija Vella in the Bank’s Data Intelligence Hub, while her PhD in Data Science was a major milestone, it is her ability to use this background to mentor her team that fuels her passion. “One of my proudest moments was leading my team to victory in an internal challenge. Seeing a group of individuals collaborate, innovate, and achieve success reinforces my belief in the power of mentorship.”

While these employees acknowledged the progress made in gender diversity, the journey hasn’t always been easy. As Test Manager Nadette Rapinett stated, “It is challenging to be the only woman in the room in male-dominated spaces. Early on it was difficult to share ideas in large groups, however, after one of my suggestions was implemented, it gave me the confidence to speak up more and embrace my voice.”

Encouraging the Next Generation of Women in STEM

As Bank of Valletta continues its digital transformation, careers in Data, AI, and Analytics are becoming key aspects of the financial sector. Claudette Pace, Head Employer Branding at the Bank, highlights BOV’s commitment to fostering an inclusive STEM culture. “At BOV, we are proud to provide career opportunities in STEM, ensuring that women have the resources, mentorship, and support they need to succeed. We are shaping a future where diversity drives innovation and where women in science, technology and data serve as important pillars of the Bank’s transformation journey.”

Input VAT incurred in relation to a business meal may be recovered by a taxable person. True or False?

Posted on by Mel Chamber

The Facts: In accordance with Article 168 of the VAT Directive, a taxable person is entitled to deduct input VAT to the extent that goods and services are used for taxable transactions. However, this right is subject to national limitations and exclusions provided under domestic VAT legislation.

The Malta VAT Act imposes restrictions on input VAT recovery, particularly on expenses categorised as entertainment, receptions, or hospitality. As specified in the Tenth Schedule of the Malta VAT Act, input VAT incurred on such expenses is classified as a blocked item, meaning it is not deductible, except where the said provision is made for consideration in the normal course of that person’s economic activity.

A business meal falls within the scope of entertainment expenses, which are explicitly disallowed for VAT recovery purposes under Maltese VAT law. Therefore, where a business treats its clients to a meal, the input VAT incurred on such expenses cannot be reclaimed.

Conclusion: Input VAT incurred in the furtherance of a business meal may not be claimed as this constitutes a blocked item.

Verdict: False

Authors: Brandon Gatt, Partner, Zampa Partners & Valentina Bruno, VAT Associate, Zampa Partners

Quest for Truth and Justice

Posted on by Mel Chamber

Bill No 125 should ensure nobody escapes justice, whilst respecting fundamental rights

The Malta Chamber of Commerce, Enterprise and Industry notes that Bill No 125, tabled in Parliament for first reading on 29th January 2025 by Government seeks to amend various articles of the Criminal Code regarding Inquiries relating to the “In Genere”, Inquests and “Reperti”. The Bill includes a number of positive elements, whereas there are other elements which require a whole rethink.

The ultimate scope of the proposed Bill should be to ensure that justice is done in a timely and an effective manner. It should also ensure that nobody escapes justice, whilst respecting the fundamental rights of every individual.

Positive elements include:

  1. having a pool of Magistrates dedicated solely to carrying out inquiries,
  2. giving the victims that are subjects of a Magisterial inquiry the right to be informed of the stage of the proceedings of the inquest,
  3. giving the heirs and relatives of victims of accidents that are subjects of a Magisterial inquiry the right to request an electronic copy of the proces-verbal at no cost,
  4. conveying onto the Magistrate the discretion to impose the costs of the inquest on the initiator, if in the opinion of the Magistrate it was frivolous, vexatious or abusive of the judicial process – the Bill also proposes extending this power to claims which are unfounded, this should not be so,
  5. provisions to facilitate the work of authorities who have investigative responsibilities in case of accidents.

However, the Bill also contains a number of provisions that need to be reconsidered and corrected:

  1. Quest for Truth and Justice:
    Currently a private citizen may either lodge a report, information or complaint with the Executive Police or request a Magisterial inquiry. Under the draft Bill, the right of a private citizen to request a Magisterial inquiry ab initio is being removed. Instead, a private citizen must first approach the Executive Police and can only request the opening of an inquest after six months from making the initial report, information, or complaint. In the quest for truth and justice, it is important not to restrict our citizens’ ability to request Magisterial inquiries on matters of public interest or to limit our Magistrates’ discretion in following leads. We should trust that our Magistrates will dismiss baseless claims, that they will use the Police and experts to dig deeper, and that they will strike a balance between the rights of suspects and the integrity of the investigation when deciding who to question and when, mindful of the disclosure of evidence that needs to be made when questioning suspects. Ultimately, both under the current law and the Bill, it is the Attorney General that decides whether an inquiry leads to prosecution, and no action that affects the personal and financial liberty of the suspect can be imposed before prosecution commences.
  2. Evidence:
    The Malta Chamber agrees that the person lodging the request should do so on oath and include the alleged criminal offences. However, The Malta Chamber does not agree with the increased level of burden of proof imposed on the initiator. The Bill requires the person lodging the request to submit “admissible proof as evidence before a court of criminal jurisdiction that shows on a balance of probabilities that the crime may have been committed by a suspected person”. One must keep in mind that the private citizen has limited access or no access to evidence which goes beyond prima facie. Under the current law, the inquiring Magistrate can act on prima facie evidence and the Executive Police can act on anonymous tips in a number of criminal instances. Placing the onus of providing hard evidence on private citizens who lack the means and the rights of access to pursue investigations privately is tantamount to obstructing justice. It is the role of the inquiring Magistrate to determine what evidence needs to be sought and to instruct the Police to carry out the necessary investigations if the quest for truth and justice so warrants.
  3. Experts:
    a. Keeping in mind that the nature of crimes is becoming more complex, it is of utmost importance to ensure that Magistrates are not limited to relying solely on local expertise. While a foundational understanding of criminal law principles is necessary, requiring experts to possess knowledge of Maltese criminal law and restricting them to local charge rates could potentially exclude valuable international expertise. For instance, financial crimes are highly complex and often have an international dimension – while local knowledge on investigating such crimes is growing, it may not always be enough.

    b. Additionally, there is also the point that the Bill states that an expert has to be a natural person and cannot be a juridical person. Many experts, both local and foreign, work for an entity. While engaging them in their personal capacity ensures that they can testify if the entity ceases to exist, one must keep in mind that there are a number of experts who cannot take on assignments (on which they will be personally working) without the involvement of the entity they work for.

    c. The Bill also states that “the role of the expert is limited to the determination of matters of fact relevant to the constitutive elements of the offence only, without expressing an opinion with regard to the commission or otherwise of the offence”. Experts are there to express a professional opinion based on their analysis of the available evidence. It is ultimately up to the Magistrate to determine what to make of that opinion as with all other elements of information available. The Magistrate is not bound by that opinion but can take it into consideration in determining the facts in issue.
  4. Accomplices, Facilitators and Collaborators:
    The Bill states that “An inquest upon the request of a private party on a suspected person shall only be carried out upon the suspected person…”. What about accomplices, facilitators, collaborators, and those involved in other crimes uncovered during the inquest? Whilst respecting their rights, they should also face justice.
  5. Retroactivity:
    The Bill will apply retroactively to several instances, including on current Magisterial inquiries in respect of which there is no final decision as yet on whether the inquest should have commenced or not. Justice must not only be done but it must also be seen to done. In light of this legal maxim, retroactivity should not be applicable.
    Undoubtedly, combating crime is no easy feat, primarily because of its clandestine nature and intricate networks. It is a challenging endeavour for all public authorities involved to tackle crime while simultaneously safeguarding human rights, such as the right to a fair trial and the right to privacy. This is why the legislator must ensure that every legal amendment must strengthen the process by which crime is suppressed and where those involved in criminal activities are brought to justice.

The current Bill may have been well-intentioned. However, the draft leaves much to be desired in our quest of justice.

Ultimately, it is the role of the political class to make sure that citizens understand the means of redress available to them at law and to distinguish between a Police report, a Magisterial inquiry, and libel cases. We have had libel cases that dragged on for various reasons, impacting people’s reputation in the meantime. There may be the need to expedite the judicial process in libel cases, but this has nothing to do with the process of Magisterial inquiries initiated by private citizens.

Let us be clear on what we want to achieve when proposing legal reforms, without confounding issues or without resorting to undue haste that only serves to fuel suspicion and detract from meaningful consultation on matters of national importance.

BOV retail conference strengthens customer experience

Posted on by Mel Chamber

Bank rolls our more flexible opening hours in the Southern Region of Malta

Bank of Valletta continues to prioritise customer service excellence through its retail network, with Managers and Team Leads across its retail network discussing ongoing improvements in service quality, accessibility, and financial guidance. BOV’s retail conferences ensure that front-line teams remain aligned with the Bank’s strategic objective to deliver a superior banking experience, making it easier for customers to manage their finances with confidence and convenience.

During the most recent retail conference, Simon Azzopardi, the Bank’s Chief Personal and Wealth Officer, reaffirmed the Bank’s commitment to supporting individuals and families in achieving their financial goals, not only through its suite of products and services but also through the support and guidance offered by its people.  He also emphasised the Bank’s growing investment in wealth management services, ensuring that customers have access to expert guidance in securing their financial future. By way of example, the introduction of dedicated Savings & Investment Bankers in Gozo is part of this ongoing effort to enhance customer experience across Malta and Gozo.

Head of the Bank’s Personal Banking Channels, Geoffrey Ghigo spoke about the importance of seeking and listening to customer feedback, ensuring that every interaction with customers, whether in-branch, through digital channels, or via the Bank’s Customer Service Centre, meets the highest standards. He highlighted improvements in branch operations, ATM availability, and reliability, as well as reduced waiting times in branches.

Adjustments to opening hours in selected branches are being piloted to better accommodate customer needs and preferences. Following the successful pilot that ran between November and December in Gozo and the Central Eastern Region, the Bank has recently rolled out more flexible opening hours on Tuesdays and Thursdays in the Southern Region of Malta, including Fgura, Marsaskala, Paola, Żejtun, Ħaż-Żabbar, Marsaxlokk, Cospicua and Birżebbuġa. The Bank is keeping priority cash service for the elderly to continue improving the in-branch experience. This service is available Fridays & Saturdays at main branches and Fridays at Satellite Branches. Cashiering services remain open daily from both the Main and Satellite Branches until 11:00. For further information about the Bank’s opening hours customers can visit the BOV website on wwwbov.com.

HSBC Malta Foundation supports new online programme for young patients

Posted on by Mel Chamber

HSBC Malta Foundation is proud to announce its support for the Karl Vella Foundation’s (KVF) latest initiative, ‘Embrace – Navigating Pain in Times of Illness.’ This innovative online programme is designed to offer critical psychotherapeutic support to young patients aged 5 to 17 who are undergoing treatment for serious or life-limiting illnesses, both in Malta and abroad.

‘Embrace’ provides a safe space for children to express their emotions and develop coping strategies. Utilising arts, crafts, narrative therapy, mindfulness, and clay as therapeutic techniques, the programme fosters creative expression and emotional healing. It aims to help young patients manage the physical and emotional challenges of illness, encouraging them to process their experiences in a supportive, interactive environment.

HSBC Malta’s commitment to this initiative aligns with the bank’s broader corporate social responsibility (CSR) vision, which focuses on improving the well-being of vulnerable groups and investing in mental health and emotional care. By partially sponsoring ‘Embrace,’ HSBC Malta is reaffirming its dedication to making a meaningful difference in the lives of those who need it most.

This initiative also touches on several United Nations Sustainable Development Goals (SDGs), particularly SDG 3: Good Health and Well-being, and SDG 4: Quality Education. By promoting psychological resilience and emotional growth among young patients, ‘Embrace’ supports holistic development and mental health.

Michel Cordina, Head of Business Development at HSBC Malta emphasised the importance of this partnership: “We are honoured to support the Karl Vella Foundation’s work, which aligns with our commitment to building a more compassionate and supportive society. ‘Embrace’ is not just a programme; it is a lifeline for young people and families facing extraordinary challenges. At HSBC Malta, we believe that investing in the emotional and mental well-being of our community’s most vulnerable members is crucial, and we are proud to play a part in this impactful initiative.”

PwC Digital’s AI Business Survey reveals a large gap in strategic planning for AI implementation in businesses

Posted on by Mel Chamber

PwC Digital has released the findings of its AI Business Survey 2024, shedding light on the current state of AI adoption among businesses in Malta. Conducted by the PwC Digital Services team, the survey provides valuable insights into the key drivers, barriers, and challenges faced by local businesses in integrating AI technologies.

The survey reveals that a significant 56% of organisations reported not having a dedicated team for AI use case assessment, highlighting a gap in strategic planning for AI implementation. An overwhelming 75% of organisations lack an AI governance framework, underscoring the need for structured oversight to ensure ethical and responsible AI deployment.

Furthermore, 41% of businesses identified the greatest impact of AI on internal operations, indicating a focus on enhancing operational processes through AI. Interestingly, only 15% of participants are considered AI Explorers, with none scoring as AI Novices, suggesting a cautious yet progressive approach to AI adoption.

This survey is grounded in extensive research and aligns with PwC’s broader studies on AI’s business impacts such as PwC’s Global AI study, which found that AI has the potential to contribute up to $15.7 trillion to the global economy, and an increased 26% boost in GDP for local economies by 2030.

 The report delves into how businesses in Malta are embracing AI technologies, examining usage, perception, and implementation trends. It also explores the structures and frameworks employed to oversee AI projects, ensuring ethical and responsible AI implementation. It provides insights into the financial commitment of businesses towards AI, reflecting budget allocations and prioritisation of AI initiatives, while also capturing general views and expected benefits from AI technology, including increased efficiency, improved decision-making, and enhanced customer experiences.

“Through this report, we aimed to understand how businesses locally are approaching the topic of AI based on four thematic areas: strategy and adoption, governance, investment, and market perspective. Based on the findings of the survey, our report recommends next steps for organisations to ensure they are leveraging AI technologies to enhance their service offerings and internal operations, consistently working towards a human-led and tech-powered future for our businesses,” said Michel Ganado, PwC Digital Partner and Digital Services Leader.

The online self-administered survey consisted of 20 questions covering four AI thematic areas, providing respondents with a maturity score at the end. Local businesses were invited to participate through various channels, resulting in 59 participants completing the survey between March and September 2024.

For a detailed analysis and comprehensive insights, download the full PwC Digital AI Business Survey Report 2024 from here.

HSBC Malta extends partnership with Malta Development Bank to support SMEs with enhanced financing options

Posted on by Mel Chamber

HSBC Malta is pleased to announce the extension of its agreement with the Malta Development Bank (MDB) to continue offering loans to small and medium-sized enterprises (SMEs) under the SME Guarantee Scheme (SGS) and the Guaranteed Co-Lending Scheme (GCLS) until the end of 2027. This renewed partnership reinforces HSBC Malta’s commitment to supporting local businesses with tailored financial solutions that drive growth, innovation and job creation.

The schemes, backed by the European Investment Fund (EIF) under the EU’s InvestEU Programme, are designed to provide SMEs with access to vital funding for sustainable investment and long-term development. Through the renewed agreement, businesses can now apply for loans of up to €1 million under the SME Guarantee Scheme (SGS) and for loans exceeding €1 million up to €10 million under the Guaranteed Co-Lending Scheme (GCLS).

“We are proud to continue our partnership with the Malta Development Bank, which enables us to provide SMEs with the financial support they need to thrive in today’s competitive market,” said Joyce Grech, Head of Commercial Banking at HSBC Bank Malta. “These schemes are a testament to our ongoing commitment to fostering innovation, sustainability, and economic growth in Malta.”

HSBC Malta’s SME clients can benefit from these schemes to address a wide range of business needs, including expansion, investment in new technologies and long-term capital projects. Businesses interested in learning more about the SME Guarantee Scheme and the Guaranteed Co-Lending Scheme are encouraged to contact their Relationship Manager or reach out to Business Banking Direct on 2380 8000 or via email on  business.banking.direct@hsbc.com

Digitalisation and Skilled Workers are Key for Malta to shift from Quantity to Quality

Posted on by Mel Chamber

The Malta Chamber and Bank of Valletta Host ‘Diagnosing the Maltese Economy’ Conference

The Malta Chamber of Commerce, Enterprise and Industry, in collaboration with Bank of Valletta (BOV), organised a conference titled ‘Diagnosing the Maltese Economy’, bringing together key stakeholders to explore Malta’s economic trends, future developments, and critical challenges.

In his opening speech, President of The Malta Chamber, Chris Vassallo Cesareo, noted that “strong governance and leadership are not just hallmarks of a healthy democracy—they are indispensable for a robust economy. A nation’s ability to navigate crises, adapt to global trends, and drive sustainable growth depends on the integrity and effectiveness of its institutions.” He also emphasised that the global economy remains uncertain, and Malta faces significant challenges, such as addressing skills shortages within industries, fostering a workforce prepared for the demands of emerging sectors, and ensuring that education and training systems align with the needs of a modern economy.

The CEO of Bank of Valletta, Kenneth Farrugia, who also participated in the panel discussion, in his closing remarks highlighted the role of governance, saying that, “governance is not just about compliance but about ensuring the resilience and sustainability of an organisation. By fostering clear lines of responsibility and planning for generational leadership transitions, we can safeguard both operational continuity and strategic vision. At a time when global economic and social dynamics are shifting, it is critical for boards and executive teams to work collaboratively, with a focus on diversity, risk management, and long-term success.”

This annual event which the business community anticipates from The Malta Chamber in collaboration with BOV, serves as a pivotal platform for industry leaders, policymakers, and experts to examine Malta’s economic trajectory, identify emerging opportunities, and assess potential risks.

Head of Economics at BOV, Malcolm Bray, shared his assessment on Malta’s economic developments and prospects. During his keynote presentation he noted that, “if we want to understand outcomes, we need to explore economic behaviour and how this is shaped by incentives.” He suggested that there is potential for greater use of capital and more entrepreneurship. He concluded that Malta’s economic outlook remains cautiously optimistic but stressed the importance of closely monitoring long-term forces such as higher life expectancy, shifts in global power, technological improvements, and climate change, as these create challenges if not well prepared for.”

Diagnosing the Maltese economy (2025_01_20)Download



During the panel discussion, moderated by Head of Media and Communications Strategy, Rachel Bondi Attard, The Malta Chamber CEO Dr Marthese Portelli said that “over the past four years, The Malta Chamber has consistently pointed out several key challenges that the country needs to address, including productivity, the labour market, and infrastructure. Despite the country’s exponential GDP growth, we failed to take the necessary steps to manage this growth effectively.” Additionally, she stated that while we often hear the terms ‘quality’ and ‘innovation,’ it is important to ensure that everyone has a clear understanding of what we aim to achieve with these concepts. “The Malta Chamber has emphasized the need to provide tourists with a quality experience. Regarding ‘innovation,’ it should address current challenges and prepare us for the future”.

Nick Spiteri Paris, CEO at BigBon Group emphasised that the biggest pain point in the retail industry is talent acquisition. He added that “one of the most significant challenges in the retail industry today, and for the past several years, has been employment and labour.” He added that “blending digital and physical retail is imperative as consumers today expect a seamless interplay between digital convenience and physical experiences.”

Natalie Briffa Farrugia, Chairperson at Vassallo Group, noted that as of 2024, only 24% of the workforce in her Group consists of Maltese and EU nationals. This begs the question: Where are the Maltese workers? She added that “while regulation is important, we must be careful not to create additional barriers, both as a country and as employers. Our goal should be to foster a balanced and sustainable workforce that benefits everyone.”