The Malta Development Bank Convenes Its First Meeting

The Malta Development Bank, whose objective is to serve as a catalyst of alternative finance, convened its first meeting. The bank’s aim will be to maximise the public socio-economic well-being rather than profit.

Finance Minister Edward Scicluna addressing the first meeting of the Malta Development Bank

The recently established Malta Development Bank convened its first meeting, hence officially start operating as the first bank of its kind in Malta. The Maltese Government could move ahead with its plans to set up this bank after it got the approval of the European Commission back in August 2016.

The Malta Development Bank’s objective is to serve as a catalyst of alternative finance. Addressing the board of directors, Minister for Finance Edward Scicluna said that the objective of the Malta Development Bank is mainly to address market failures by offering financing facilities to support productive and viable operations when the market is unwilling or unable to accommodate them. This echoes previous comments he made at a conference organised jointly by the European Investment Bank and the Central Bank of Malta, six weeks prior.

During that conference, which was themed “Investment and Investment Finance – the case of Malta”, Scicluna had said the the bank’s operations would be focusing on the provision of facilities to SMEs and infrastructure projects that contribute to national or regional development. Rather than profit maximisation the bank’s primary drive would be to support socio-economic objectives in the public interest. The MDB would effectively act as a lender of last resort on a non-competitive basis, while also financing large infrastructure projects whose timeline and risk profile would discourage the participation of commercial banks.

The paid-up capital of the Malta Development Bank is €30 million, whilst the authorised share capital is €200 million. This capital is expected to be financed through the proceeds of the Individual Investor Program. The MDB is also expected to play a pivotal role in the “700 million Euros to fix all of Malta’s roads in 7 years” project amongst other.

The board is chaired by Professor Josef Bonnici, an economist who specialises in Monetary and Macroeconomics. Bonnici is also the outgoing Governor of the Central Bank of Malta, a former member of the European Court of Auditors, and a former Minister for the Economy (during the 1998-2003 Nationalist Government led by Eddie Fenech Adami). The other members of the board are Paul Abela (GRTU President), Rose Azzopardi, Robert Borg, Paul Cardona, Godfrey Grima and Anthony Valvo as Directors. The Bank’s CEO is Rene Saliba.

 

The Malta Development Bank will be supervised by a specially appointed supervisory board composed of John Cassar White as Chairman,  while Oliver Bonello  (Deputy Governor, Central Bank of Malta), Alfred Camilleri (Permanent Secretary at the Ministry of Finance),  Chris Cilia and Marianne Scicluna (DG, MFSA) will serve as Directors.​

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