Malta is increasingly being viewed as a high-risk jurisdiction, making it harder for Bank of Valletta to forge relationships with correspondent banks, BOV’s new CEO says in an interview with The Sunday Times of Malta.
Rick Hunkin, who was appointed last November, expressed his gratitude for a three-month extension to its US dollar correspondent banking relationship with ING.
ING was initially slated to terminate its correspondent bank operations with BOV in December.
Correspondent banks facilitate wire transfers and other business transactions, typically for smaller domestic banks. Currently, BOV is managing to maintain sufficient relationships with correspondent banks to ensure dollar payments.
Read the full interview here.
Mr Hunkin says the bank is working with Western Union to put in place a new dollar payment arrangement.
Further backslide would harm country
“As long as we can sustain the capability to deliver international trade, then neither us nor our clients will suffer.”
He warns that any further backslide in Malta’s reputation would harm the whole country.
If the position were to worsen so far that international trade doors become closed to Malta as a whole, it would have a knock-on impact on BOV clients who trade internationally, as well on all the big international companies that either operate from abroad into Malta or vice-verse, Mr Hunkinwarned.
The CEO did not rule out discussions about a further extension with ING, but this would be done in tandem with the work to identify other correspondent banking relationships.
BOV has been in the headlines for a number of reasons over the past few years and has since undergone a significant de-risking exercise to minimise its exposure to money laundering risks.
Mr Hunkin said BOV had closed a “significant” number of accounts owned by Maltese passport buyers.
He said in cases where BOV was unable to obtain information about the passport buyer’s funds, or in some cases could not even trace the customer, the accounts were closed.
The bank would continue to service bona fide passport buyers who were able to demonstrate that they and the source of their funds were genuine, he said.
One common complaint among ‘ordinary’ foreign Maltese residents is the difficult in opening a bank account.
Mr Hunkin promised that this would change.
“I am sure all the CEOs of the banks over here will be looking at this,” Mr Hunkin said.