Updated Tuesday 4.15pm with BOV clarification
Bank of Valletta is reversing some of the letters it had sent to online betting firms informing them of an imminent termination of banking facilities, as some gaming operators were included by error, Times of Malta is informed.
Bank sources have told Times of Malta that some of the companies which, to their surprise, were told their accounts would be closed have now received correspondence asking them to ignore the original notice.
This was confirmed by major gaming companies.
“It seems that in the de-risking exercise, letters were sent to almost all gaming operators without distinction. This has now been rectified and the bank admitted that this was an error on their part,” gaming industry sources said.
Asked to confirm, a spokesman for BOV said: “This process will eventually be carried out with all the bank’s customers so whilst we are doing our utmost to limit inconveniences, we do not rule out that there would be some misunderstandings, which are regretted.”
Later on Tuesday, BOV clarified: "The bank has not reversed any account closures and no form of correspondence has been sent asking recipients to ignore any original notices. It was only one instance this happened and it was a genuine error. In fact, the customer only received the email and not the follow-up letter. What we want to reiterate is that the bank has not reversed any decisions on account closures and no form of correspondence has been sent by the bank asking recipients to ignore any original notices."
We do not rule out that there would be some misunderstandings which are regretted
Last week, Times of Malta revealed that some gaming operators and other companies which are related to the cash-for-passport scheme were being given two months’ notice by BOV to find alternative banking arrangements as their accounts were going to be closed.
CEO Mario Mallia confirmed that this was part of an ongoing exercise in which the bank had come up with a new “risk profile”, in agreement with the European Central Bank, which laid out how much risk the bank should operate under.
BOV has been under pressure during the past year, suffering a downgrade in its credit rating and an ECB inspection warning of consequences particularly where it comes to operational risks.
The gaming industry, a major contributor to Malta’s economy, is one of the major industries considered by many in banking business as “high-risk”.
Malta’s other major bank, HSBC, had severed much of its links with the industry years ago.
BOV has been the only major bank serving the gaming industry and according to industry officials, “if the door is also shut by BOV there will be problems”.
“BOV was the only major bank available to the gaming industry as neither HSBC nor BNF accept to work with gaming operators.
“If BOV also shuts its facilities, the industry, which is already in a status quo situation where it comes to growth, may be jeopardised,” one senior official in a gaming company said.
On the other hand, other gaming insiders said that serious gaming operators had already seen this coming and made arrangements overseas to keep open credit lines.
“It is only those gaming companies who are mismanaged or have put all their eggs in one basket that will suffer most,” an official from another company said.