Former Central Bank deputy governor Alfred Mifsud is regularly attending Bank of Valletta board meetings despite the fact he is not a member of the board.
Mr Mifsud’s continuous presence at the bank’s headquarters could be indicative of possible changes at the top that the government intends to introduce soon, according to senior sources at the country’s largest bank.
A bank spokesman confirmed that Mr Mifsud, a former chairman of Mid-Med Bank, is attending board meetings “by invitation”.
However, he denied that the bank has initiated the process to nominate Mr Mifsud as an official board member.
“Mr Mifsud, together with other consultants, attends board meetings by invitation, in his capacity as an experienced finance professional who is assisting in the transformation programme of BOV,” the spokesman said.
Pressed to state whether the bank is seeking clearance by the European Central Bank to appoint Mr Mifsud formally to the board, the spokesman said that so far, this was not the case.
A BOV spokesman confirmed that Alfred Mifsud is attending board meetings by invitation
“There are no pending applications for a directorship on the board,” he said.
Prospective directors and key function holders are always subject to regulatory approval by the Joint Supervisory Team, comprising representatives of the European Central Bank and the Malta Financial Services Authority, he insisted.
The bank is currently chaired by Deo Scerri, an accountant by profession. The Bank of Valletta chairman is appointed by the government.
In 2015, after selling his financial consultancy business, Crystal Finance, Mr Mifsud was made deputy governor of the Central Bank and was touted for the top post. However, he pulled out shortly before his nomination in 2016 following allegations of impropriety by his former partner. Mr Mifsud denies the allegations.
BOV board member Joseph Zrinzo recently resigned “for personal reasons”. The father of Labour MP Stefan Zrinzo Azzopardi, he had served on the board since the Labour Party was returned to power in 2013.
Asked whether Mr Zrinzo’s resignation could be attributed to any direction from the European Central Bank, the BOV spokesman insisted “there is no matter concerning Mr Zrinzo that merits any further disclosure”.
Mario Mallia, the bank’s CEO who sits on the board, will retire at the end of the year. The bank said it has already started the process to appoint a new CEO.
Bank of Valletta – a major cogwheel of Malta’s economy – has been hit by a series of negative news in the past two years, which has led to its credit rating downgrade by Standard & Poor’s.
Last July, the rating, previously at BBB with a negative outlook, was stepped down to BBB- with a stable outlook.
The international credit rating agency cited perceived weakness in the bank’s internal control framework and potential impact from its ongoing international litigation cases for its downgrade.
Last February, the bank was forced to suspend all its operations after hackers broke into its IT systems and moved €13 million into foreign accounts.
On the instructions of the ECB, Malta’s financial regulator had also written to the bank expressing “serious concern” about managerial shortcomings in its operations.
In view of these challenges, the bank is currently on a two-year reform programme with the assistance of international consultancy firms.