Bank of Valletta remained tight-lipped on the future of the €36m loan given to Steward Health Care when contacted by Times of Malta, after the company filed for bankruptcy in a US court on Monday.

In a written reply, BOV said that it “cannot comment publicly on confidential client matters”.

“We reaffirm that we have in place very strong due diligence and credit governance processes that meet regulatory requirements and expectations. The Bank adheres to all its regulatory obligations and informs the market as needed,” a bank spokesperson said.

BOV were asked whether the bank featured as a creditor in Steward’s bankruptcy filing and what action the bank took to recoup the funds.

In a statement published on Tuesday afternoon, PN called on BOV to “clarify its position” on the loan in the wake of Steward’s bankruptcy.

This needed to be done in the interest of “the hundreds of thousands of Maltese people who trust the bank with their money”, as well as for the sake of Malta’s financial system, the party said.

Taxpayers to foot the bill in case of default

BOV had granted Steward a series of loans throughout 2018 and 2019 amounting to just under €36m, raising questions by independent candidate Arnold Cassola over the due diligence carried out by the bank.

The loans were guaranteed by the government, effectively meaning that taxpayers would be footing the bill if the company defaulted on the loan.

It is unclear how much of these loans have been repaid.

Last year, Justice Minister Jonathan Attard said that Steward had “kept up” with loan repayments, but the news of Steward’s bankruptcy suggests that the matter now lies in the hands of a Texas court.

Steward took over the concession that had awarded St Luke’s Hospital, Karin Grech Hospital and Gozo General Hospital to Vitals Global Healthcare in 2018, but the company’s presence in Malta was short-lived.

Maltese courts scrapped the deal altogether in early 2023, under the suspicion of fraud. The decision was confirmed on appeal later in the same year, with courts finding "collusion between Steward and senior government officials or its agencies".