Malta’s banking landscape has evolved significantly over the years, with Bank of Valletta at the forefront of this transformation. From its inception, BOV has been instrumental in shaping the financial sector, particularly in business banking.
Here we take a look at Bank of Valletta’s business banking journey, encompassing product development, its support during challenging times like the COVID-19 pandemic, the establishment of business centres, and the creation of the Corporate Finance and Trade Finance Centre, with a special focus on the expertise of its people and the importance given to one-on-one relationships.
Product development: Adapting to business needs
Bank of Valletta’s commitment to innovation has driven its product development strategy. Initially, BOV’s offerings were limited to basic banking services. However, as the business landscape grew more complex, so did the bank’s products.
One of the key developments was the introduction of tailored financing solutions. Recognising the diverse needs of businesses, BOV developed a range of loans and credit facilities designed to support various sectors, from start-ups to established corporations.
The bank’s portfolio expanded to include working capital loans, trade finance, and asset-based financing, ensuring that businesses have access to the funds necessary for growth and stability.
Two significant products in BOV’s portfolio are the BOV JEREMIE Financing Package, which was a first for the Maltese market, that was later followed by the BOV JAIME Financing Package. Both were pivotal in supporting the Maltese SMEs.
The JEREMIE (Joint European Resources for Micro to Medium Enterprises) initiative, managed by BOV as the sole Maltese intermediary, provided significant capital to SMEs at reduced interest rates and lower collateral requirements. In its first year, the JEREMIE programme sanctioned €27.9 million in loans, spurring an investment of €44.6 million by 286 SMEs. Over its duration, 602 loan facilities were granted to 533 SMEs, totalling €48.6 million and generating €83.5 million in economic activity. The success of JEREMIE highlighted BOV’s commitment to fostering entrepreneurship and economic growth in Malta.
The JAIME (Joint Assistance Initiative for Maltese Enterprises) Financing Package was the second product offered by BOV following an agreement with the European Investment Fund (EIF). This package utilised EU Structural and investment Funds, aiming to provide discounted interest rates and reduced collateral requirements for eligible SMEs. Through JAIME, BOV has facilitated access to over €100 million worth of financing, benefitting more than 900 SMEs.
Green products
Bank of Valletta has also prioritised sustainability, introducing various environmentally-friendly financial products. The Energy Efficiency and Renewable Energy (EERE) Malta Fund, which was another risk sharing instrument developed with the EIF, enabled BOV to offer zero percent interest loans for green investments.
Products like the BOV Business Energy Loan, along with the BOV Home Energy Loan and BOV Personal Energy Loan were highly popular, supporting investments in photovoltaic panels, insulation, cooling, and electric vehicles. The significant demand for these products demonstrated the market’s shift towards sustainable practices and BOV’s role in facilitating this transition.
Support during difficult times
The COVID-19 pandemic was a significant challenge for businesses worldwide, and Maltese enterprises were no exception. BOV played a crucial role in supporting the local economy during this period. Recognising the financial strain on businesses, BOV implemented several measures to alleviate the impact.
One of the most notable initiatives was the introduction of the COVID-19 Business Assist Scheme. This scheme provided businesses with much-needed liquidity through government-backed loans, helping them to manage operational costs and preserve jobs. BOV worked closely with the Maltese government to expedite the processing of these loans, ensuring timely support for businesses in distress.
In addition, the bank offered moratoriums on existing loan repayments, giving businesses the breathing space needed to navigate through the crisis. The Bank also provided advisory services to help businesses reassess their financial strategies and adapt to the new economic reality. This comprehensive approach underscored BOV’s commitment to the local business community during one of the most challenging periods in recent history.
Business centres: A hub for business banking
Understanding the need for specialised support, Bank of Valletta established several business centres across Malta. These centres serve as dedicated hubs for business banking, providing personalised services and expert advice.
Every Business Centre is staffed with experienced relationship managers who understand the unique needs of businesses. These professionals offer tailored solutions and proactive support, helping businesses navigate financial challenges and seize growth opportunities. The centres also provide a range of services, from account management to complex financial planning, ensuring that businesses receive holistic support.
The expertise of BOV’s relationship managers is a cornerstone of the bank’s service model. These professionals possess deep industry knowledge and financial acumen, enabling them to provide strategic advice that aligns with the specific goals and needs of every business. This one-on-one relationship is pivotal, fostering trust and ensuring that clients receive personalised and responsive service.
Corporate Finance and Trade Finance Centre
To further enhance its business banking services, Bank of Valletta established the Corporate Finance and Trade Finance Centre. While both divisions offer specialised financial solutions they cater to different aspects of business finance.
The Corporate Finance division focuses on supporting large corporations with substantial financial needs. BOV’s expertise in corporate finance helps businesses undertake significant financial transactions with confidence. This includes providing strategic advice on complex deals, and assisting with restructuring efforts. The team’s goal is to enable large corporations to optimise their financial structure and support long-term growth strategies.
On the other hand, Trade Finance is tailored to facilitate international trade and commerce. This division offers solutions like letters of credit, documentary collections, and export financing. These services are crucial for businesses engaged in cross-border transactions, helping them manage risks and optimize cash flow.
Trade finance products ensure that exporters receive payment and importers receive their goods, thereby reducing the risks associated with international trade. By offering these services, BOV supports businesses in navigating the complexities of global commerce, ensuring smooth and secure transactions.
The importance of one-on-one relationships extends to these specialised areas as well. BOV’s experts work closely with clients to understand their unique requirements and tailor solutions that meet their specific needs. This personalised approach ensures that businesses receive the highest level of service and expertise.
Conclusion
Bank of Valletta’s evolution in business banking reflects its commitment to supporting the local economy and adapting to the changing needs of businesses. Through innovative product development, dedicated support during crises, the establishment of business centres, and specialized expertise in corporate and trade finance, BOV had cemented its position as a key player in Malta’s financial sector.
The bank’s proactive approach and unwavering commitment to its clients ensure that it will continue to play a pivotal role in Malta’s economic development for years to come. The expertise of its people and the emphasis on one-on-one relationships are central to BOV’s success, providing businesses with the trusted partnership they need to thrive.
This article was first published in the BOV 50th Anniversary magazine.