Malta Confirms High Investor Confidence Rating

Malta Confirms its High Investor Confidence Rating

During the first Financial Services Survey held in Malta between March and April of 2016, forty-four organizations from across a number of financial industries were asked to rate their performance and business prospects in comparison to their position six months before. Notwithstanding the various challenges being faced by the Financial Services industry, namely increased regulatory control, the EU’s push for increased tax harmonization and the aftermath of the so called Panama Papers, the survey shows 59% of respondents reporting increased business volumes.

Optimism and growth within the Maltese financial services sector remains strong. Within the banking sector, 33% of the respondents report being optimistic about the overall business situation in the sector. Within the insurance sector, 75% of firms reported increased volumes of business with 17% stating that they were more optimistic about the overall business situation in their sector. 55% of asset management firms report increased volumes of business and as much as 60% are expecting business volumes to continue increasing over the coming six months. Increased employment and payroll costs, regulatory compliance and spending on capital expenditure, particularly for IT systems have contributed to increased costs across the board.

The survey also asked respondents to widen their spoke and give their views on the overall situation of Malta’s financial services industry and its future prospects. Respondents retained their positive stance however acknowledged that a number of challenges had to be surpassed in order for the industry to be able to move forward. The general concerns highlighted by the respondents regard the impact of the proposed Base Erosion and Profit Sharing (BEPS) tax rules, the introduction of the Common Reporting Standard, the Brexit referendum and the negative light shed on financial centers across the globe due to the Panama Papers scandal. Respondents also noted the difficulty in opening and maintaining bank accounts locally as a challenging aspect of their business model.