In a pure banking history context, it needs to be recognised that, in terms of the typologies of banking institutions, savings banks were one of the consequences of the Industrial Revolution in Europe. The latter speeded up the creation of various types of banks, such as building societies, cooperative banks, agricultural credit banks, industrial banks and – often on a localised basis – even savings banks. To these, one might also add postal, or giro, banks.

Savings banks still exist and operate to this day; some indeed are highly respectable ones such as Italy’s Casse di risparmio postali, or the Postbanken in Germany, Austria, the Netherlands, Switzerland and elsewhere.

In a Sunday Times of Malta article, dated 1968, S. F. Portelli records that around 1832, there were individuals who were making efforts for the setting up in Malta of what was being touted as a Società di Risparmio e Fortuna. The idea that there should exist a national savings bank in Malta was, however, floated even before that date, between 1824 and 1826, when Malta was under the governship of the General (Marquis) of Hastings. Portelli claims that there were references to the idea in the Public Records Office in London.

Hastings seems to have been the first British governor towards whom the Maltese had developed a good level of liking. But his savings bank idea needed a further seven years to mature. It was, in fact, his successor – Sir Frederick Cavendish Ponsonby – who on November 21, 1833, issued an official proclamation for what was originally named as Provvido Banco Maltese per Risparmi (Maltese Provident Bank for Savings).

On the first day of this bank’s public functioning, eight depositors visited its office and between them deposited the sum of £78 and 2 shillings; for those times, it was clearly a good start and on a good footing. As opposed to savings banks in other jurisdictions (e.g. Holland, Germany, Italy, etc), this Malta Government Savings Bank retained an official link with the State’s Treasury Department for practically the whole of its life. By the end of its first year, the number of depositors had risen to 180.

Between 1838 and 1848, the Government Savings Bank and the Monte di Pietà (an institution born under the Knights of St John) were in a sense under common management. In September 1837, there had been set up a committee for the management of all the government’s Institutes of Charity, and all monies deposited in the Government Savings Bank would end up being on-loan by the Monte di Pietà to those who would pawn with it their gold and silver possessions. The first branch of the Government Savings Bank in Gozo started to operate on June 1, 1853.

After January 1938, Governor Sir Henry Frederick Bouverie had decreed the reduction of the interest rates given by the bank from three to two per cent, and besides the bank’s main office in Valletta – then at Archbishop’s Street – new branches started opening.

In a certain sense, this was the taking of banking out of ‘limited’ Valletta into the towns and villages of Malta (albeit operating in practically all the government’s post offices), something which local banking historians sometimes also attribute to actually having been done in later years, in the 1960s, when the same was done by the commercial bank Barclays Bank.

In 1909, the Government Savings Bank introduced ‘bearer savings accounts’ as a new service. With Italian being common language parlance, the locals used to refer to them as al portatore. At more or less the same time, fixed-term deposits (one year) were also introduced. 

The government’s budgetary estimates for the years 1917-1918 (totalling £5,767) made specific reference to the Banco dei Risparmi, and included a vote of £300 for the salary of Giorgio Delali who, besides his official position as assistant treasurer to the government, also functioned as manager of the Savings Bank.

Its record of having been a good tool for the nation during its lifetime remains untainted

Other noteworthy public officers, who over their careers served within the Government Savings Bank, included Toni Farrugia, Neville Wood, Joe Portelli, Antoine Pace, Joseph Lungaro Mifsud, Wilfred Garroni and Ronald Chalmers (despite the surname, the latter was no relation to the Roderick Chalmers, who many years later chaired Bank of Valletta).

One needs to keep in mind that other banks were also operating in Malta at the time. And they too were essentially offering the service of savings products in similar or different formats. In 1952, Governor Sir Gerald Creasy gave his assent to Act No. XIV/1952 entitled ‘An Act to make provisions regard the receipt of money in savings accounts’. It is reasonable to consider that piece of legislation as one of Malta’s earliest forms of financial services regulation, with the aim obviously being that of ensuring certain minimum forms of customer treatment by the practitioners.

In following years, the Malta Government Savings Bank continued to earn ever-growing trust and support from the locals. On September 1, 1961, the colonial government published an ordnance which, among other matters, provided for, firstly, the government accepting to thenceforth guaranteeing all deposits, and the thereupon accruing interests, held with the bank, and, secondly, that if at any time the bank’s assets would prove insufficient to cover such deposits and interests, then it would be the government’s normal operating income that would provide such cover.

In the 1960s and 1970s, the International Monetary Fund (IMF) was very proactive in propagating the savings habit on a worldwide scale. Every year, member states, including Malta, would celebrate World Savings Day, and the Malta Government Savings Bank would be prominent with its activities among, for example, schoolchildren.

I was a student on an Italian Ministry of Foreign Affairs stage at the head office of the Banca Nazionale del Lavoro and La Sapienza university in Rome at the time, and all foreign students would be invited to a formal celebration at the Campidoglio for the occasion. I still treasure that passage from former Italian president Giuseppe Saragat’s speech where he declared, inter alia, that “il risparmio è alla base di ogni piano” (savings is the bedrock of every – presumably economic – plan).

By the end of 1969, children in Malta’s schools had £300,000 deposited with the Malta Government Savings Bank, with £30,540 having been deposited by children from Malta’s schools, and £2,471 from those in Gozo.

The Government Savings Bank’s lifetime was reaching an end by December 1983. My copy of the bank’s accounts as at end of 1982 importantly shows that at that date the bank held £52,300,000 by way of its customers’ deposits, with £53,700,000 appearing on the opposite side of the balance sheet in the forms of cash, government securities and other investments. This prima facie suggests a liquidity surplus of only 2.7 per cent, which was certainly not an impressive level when compared to the ratios of other financial institutes in Malta at the time.

From late 1983, the process for transferring all the deposits held with the Malta Government Savings Banks to other banks in Malta gathered good pace. By the end of 1983, when the bank effectively closed its doors, the amount of deposits not yet transferred to other local banks stood at just over £2,000,000 and, by March 1986, that figure crept steadily down to only £332,000.

One would be right in holding that the Malta Government Savings Bank’s demise was more a planned than a natural one. Certainly, the nation’s record of ever-increasing savings and liquidity in its banking system was not tainted by that demise, but the Malta Government Savings Bank’s record of having been a good tool for the nation during its lifetime remains untainted. Throughout its existence, it was managed by people of the highest integrity.

John Consiglio is the author of A History of Banking in Malta (Progress Press, 2006) and co-author of Banking and Finance in the Mediterranean: A Historical Perspective (Ashgate, 2012).