There is a certain solidity to the Mediterranean Bank head office on St Barbara Bastion in Valletta. The architecture has expressive flourishes but is compact. The ceilings are too high for any voice to disturb. And right across the street is a rise of stocky bastions which have defended the capital for centuries.
Such solidity is reflected in Mediterranean Bank’s interim financial statements. Released on November 12, the unaudited consolidated interim financial statements for the six-month period which ended on September 30 show an increase of 30.9 per cent in net interest income and an increase of 15.7 per cent in its deposit base.
In the past years, Mediterranean Bank has gone from strength to strength. So much so that last June, the Central Bank of Malta reclassified Mediterranean Bank as a core bank, which means that it has increased its domestic relevance. Internationally, Mediterranean Bank has also continued to grow with the opening of a bank in Belgium, operating within the MedBank Group.
Following the acquisition of Volksbank Malta, Mediterranean Bank has also become Malta’s third largest bank.
“We owe our growth to various factors,” Mark Watson, Mediterranean Bank CEO, says. “First of all, we focus on a particular niche and client, and we’re very good at that. We know our clients. Most of them own a home, a car and are largely settled financially. Our role is to help them manage their wealth.
“Opening a branch in Belgium has enabled us to achieve further growth. We are also operating on three fronts through Mediterranean Bank, which offers products and services to domestic clients, Mediterranean Corporate Bank, which caters for corporate clients, and MeDirect Bank in Belgium.
“Our Belgian operation is both innovative and efficient. It adds momentum to our growth and enhances our customer proposition. Moreover, this international presence is supported from our first class operating centre in Malta.”
Mediterranean Bank’s strong performance is reflected within the wider context of the local economy. The diversified financial services sector, especially, has become a solid contributor to the local economy.
“In recent years, Malta’s economy has moved from a manufacturing to a services base,” Watson says. “The financial services sector owes its success to various factors, including a sound yet flexible regulatory regime, excellent work ethic, good infrastructure, and Malta’s attractive lifestyle. Moreover, following the economic downturn, people and businesses who had never considered southern Europe as a base are now moving here.
“Malta also has a very valuable resource in that the majority of the Maltese speak English. This is a significant advantage.”
The good performance of the financial services sector is also reflected in the World Economic Forum’s Global Competitiveness Index 2014-15, which ranks Malta in 10th position (out of 144) with regards to the soundness of banks.
“Trust is key to the success of any business, including banks. People don’t change their bank every week. A bank’s clients are mostly long-term. In some cases, generations of the same family are clients. This is why at Mediterranean Bank, we have a long-term focus.
“We also build trust by being local. This is reflected in our branding. We are Mediterranean. We are local
“The local banking system is well capitalised and has an excess of savings – this combination makes for a very stable system and economy. To attract more business to Malta, we need to deliver this message of solidity internationally.”
The banking system has remained largely unchanged for centuries. How can a bank achieve innovation?
“It is true that the underlying principle of banking has remained largely unchanged through the years,” Watson says. “However, banks can still be innovative. At Mediterranean Bank, we innovate in the way we deliver our services at a superior price point, in an efficient way and through an excellent customer service. This is what we try to do – deliver innovatively.
“We are very satisfied with the path we have taken and for 2016, our plan is to continue on the same path. We aim to raise more capital to underpin our growth, reform processes and technology where necessary, and put plans in place to achieve more growth.”
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