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Economy and Banking Sector of Malta

Malta
Location
Mediterranean Sea
Population  (2017)
440 433  (+0.01%)
EU Status
member since 2004
Currency
EUR (Euro)
Nominal GDP (2016)
9.9 bln EUR  (+0.11%)
Credit Ratings (as of Sep 2016)
A/A3
Consolidated Banking Assets (2016)
46 384.43 mln EUR  (-1.60%)
Deposit Guarantee
100 000 EUR
Number of Banks
26

Malta is a Southern European island country, located in an archipelago in the Mediterranean Sea. Malta is a member of the European Union since 2004 and of the Economic Monetary Union (Eurozone) since 2008.

Malta is an advanced economy, possessing favourable geographic location and productive labour force. Malta's main industries are electronics, ship building and repair, construction, food and beverages, pharmaceuticals; key services sectors of the Maltese economy are tourism and aviation services, financial and information technology services.

Malta is establishing itself as an international banking centre and hub for finance in the Mediterranean region. Malta's banking sector has transformed from one having several retail banks serving the local population to a diversified landscape with domestic and foreign-controlled banks, providing a variety of solutions from traditional retail banking products to sofisticated customized private banking, wealth management and corporate banking products.

List of Banks in Malta
Banks in Malta

National Currency

Euro (EUR)

Malta joined the Euro Area on 1 January 2008. The preceding national currency, Maltese lira (MTL), was replaced by Euro.

GDP

Nominal GDP (2016)Nominal GDP per Capita (2016)Real GDP Growth (2016)
9.9 bln EUR  (+0.11%)22 700 EUR  (+0.10%)5.0 %  (2015: 6.3 %)

According to Eurostat, nominal GDP of Malta in 2016 was 9.9 bln EUR.

Malta outperforms the European Union in terms of real GDP growth with the average annual differential coming to 2.2% over the past 10 years (2006 - 2016). In 2016 real GDP growth was 5.0% which was above the Euro Area average (1.8%) and above the European Union average (1.9%). Real GDP growth in 2017 - 2022 are IMF's estimates.

Real GDP Growth in Malta.

Chart 1. Real GDP Growth in Malta. Source: Eurostat, International Monetary Fund.

In 2016, nominal GDP per capita in Malta was 22 700 EUR.

Malta has an above-average level of wealth in terms of per-capita GDP at purchasing power parity (PPP); this economic welfare indicator has, on average, exceeded that of the European Union by 0.9% over the past 10 years (2006 - 2016). GDP per capita at PPP in 2017 - 2022 are IMF's estimates.

GDP Per Capita at Purchasing Power Parity in  Malta; European Union = 100.

Chart 2. GDP Per Capita at Purchasing Power Parity in Malta; European Union = 100.

Inflation Rate

CPI, MoM (Sep 2017)CPI, YoY (Sep 2017)CPI, Year Average (2016)
-0.9 %  (Aug 2017: 0.4 %)1.2 % (unchanged)0.9 %  (2015: 1.2 %)

According to Eurostat, inflation rate in Malta in 2016 expressed as annual percentages of average consumer prices was 0.9% which was above the Euro Area average (0.2%) and above the European Union average (0.3%). Inflation rates in 2017 - 2022 are IMF's estimates.

Inflation Rate in Malta.

Chart 3. Inflation Rate in Malta. Source: Eurostat, International Monetary Fund.

Unemployment Rate

Unemployment Rate (2016)
4.7 %  (2015: 5.4 %)

Government Bond Yield

Government Bond Yield (Sep 2017)
1.26 %  (Aug 2017: 1.23 %)
According to Eurostat, government bond yield in Malta in Sep 2017 was 1.26%, compared to 1.23% in Aug 2017.
Government bond yield of Malta.

Chart 4. Government bond yield of Malta. Source: Eurostat.

Credit Ratings (as of Sep 2016)

Fitch Moody's
A (high credit quality), outlook positive A3 (upper medium grade), outlook stable

Withholding Tax

Withholding taxes are imposed at source of income and are often applied to dividends, interest, royalties, rent and similar payments. The rates of withholding tax are often reduced by double taxation agreements.

Withholding Tax Rates in Malta: 0.0 - 15.0%

Withholding tax rates applied on payments of interest and dividends in Malta are shown in Table 1.

Dividends Interest
Natural person, resident 15.0 %15.0 %
Natural person, non-resident 0.0 %0.0 %
Table 1. Withholding tax rates in Malta.

Double Taxation Agreements

Double Taxation Agreement (DTA) is an agreement between two or more countries for the avoidance of double taxation.

DTAs of Malta: 72 Signed Agreements

Malta signed DTAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):

 Albania
 Australia
 Austria
 Bahrain
 Barbados
 Belgium
 Bulgaria
 Canada
 China
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Egypt
 Estonia
 Finland
 France
 Georgia
 Germany
 Greece
 Guernsey (Mar 2013)
 Hong Kong
 Hungary
 Iceland
 India
 Ireland
 Isle of Man
 Israel (Dec 2013)
 Italy
 Jersey
 Jordan
 Korea, Republic of
 Kuwait
 Latvia
 Lebanon
 Libya
 Lithuania
 Luxembourg
 Malaysia
 Montenegro
 Morocco
 Netherlands
 Norway (Feb 2013)
 Pakistan
 Poland
 Portugal
 Qatar
 Romania
 Russian Federation (May 2014)
 San Marino
 Saudi Arabia
 Serbia
 Singapore
 Slovakia
 Slovenia
 South Africa
 Spain
 Sweden
 Switzerland
 Syrian Arab Republic
 Tunisia
 Turkey (Jun 2013)
 United Arab Emirates
 United Kingdom
 United States
 Uruguay

There are also several agreements between Malta and other jurisdictions which were signed but haven't yet come into force (for agreements signed after after 1 January 2013 of signing the agreement is given in brackets):

 Iceland (Apr 2013)
 Liechtenstein (Sep 2013)
 Mexico
 Moldova, Republic of (Apr 2014)
 Russian Federation

Information Exchange

There are 3 ways for jusrisdictions to exchange information on tax matters:

  • spontaneously;
  • on request;
  • automatically.

Spontaneous exchange of information is provision of information that is forseeably relevant to another party without a request being previously sent.

Tax Information Exchange Agreements (TIEAs) enable exchange of information on request relating to a specific tax investigation, either criminal or civil.

Automatic information exchange allows jurisdictions to exchange information automatically, without having a specific tax investigation.

Exchange on Request: 5 Signed Agreements

Malta signed TIEAs which already came info force with the following jurisdictions (for agreements which came into force after 1 January 2013 the date of coming into force is given in brackets):

 Bahamas
 Bermuda
 Gibraltar

There are also several agreements between Malta and other jurisdictions which was signed but haven't yet come into force (for agreements signed after 1 January 2013 of signing the agreement is given in brackets):

 Cayman Islands (Nov 2013)
 Macau (May 2013)

Automatic Exchange: Starts in September 2017

Malta signed the automatic information exchange agreement on 29 October 2014 and committed to start the automatic information exchange in September 2017.

Automatic Excnange: 58 Bilateral Agreements to Receive Information

Malta has signed bilateral agreements with 58 jurisdictions to automatically receive information:

 Andorra
 Argentina
 Australia
 Austria
 Belgium
 Bonaire, Saint Eustatius and Saba
 Brazil
 Bulgaria
 Canada
 China
 Colombia
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Estonia
 Faroe Islands
 Finland
 France
 Germany
 Gibraltar
 Greece
 Greenland
 Guernsey
 Hungary
 Iceland
 India
 Ireland
 Isle of Man
 Italy
 Japan
 Jersey
 Korea, Republic of
 Latvia
 Liechtenstein
 Lithuania
 Luxembourg
 Malaysia
 Mauritius
 Mexico
 Monaco
 Netherlands
 New Zealand
 Norway
 Poland
 Portugal
 Romania
 San Marino
 Seychelles
 Singapore
 Slovakia
 Slovenia
 South Africa
 Spain
 Sweden
 Switzerland
 United Kingdom
 Uruguay

Automatic Excnange: 70 Bilateral Agreements to Send Information

Malta has signed bilateral agreements with 70 jurisdictions to automatically send information:

 Andorra
 Anguilla
 Argentina
 Australia
 Austria
 Belgium
 Belize
 Bermuda
 Bonaire, Saint Eustatius and Saba
 Brazil
 British Virgin Islands
 Bulgaria
 Canada
 Cayman Islands
 China
 Colombia
 Costa Rica
 Croatia
 Cyprus
 Czech Republic
 Denmark
 Estonia
 Faroe Islands
 Finland
 France
 Germany
 Gibraltar
 Greece
 Greenland
 Guernsey
 Hungary
 Iceland
 India
 Indonesia
 Ireland
 Isle of Man
 Italy
 Japan
 Jersey
 Korea, Republic of
 Latvia
 Liechtenstein
 Lithuania
 Luxembourg
 Malaysia
 Mauritius
 Mexico
 Monaco
 Montserrat
 Netherlands
 New Zealand
 Norway
 Poland
 Portugal
 Romania
 Saint Lucia
 Saint Vincent and The Grenadines
 Samoa
 San Marino
 Seychelles
 Singapore
 Slovakia
 Slovenia
 South Africa
 Spain
 Sweden
 Switzerland
 Turks and Caicos Islands
 United Kingdom
 Uruguay

Further Information

FATCA

Foreign Account Tax Compliance Act (FATCA) which became law in the United States in March 2010, focuses on reporting made by foreign financial institutions about financial accounts held by US taxpayers or foreign entities in which US taxpayers hold a substantial ownership interest. The FATCA-reporting is facilitated by Intergovernmental Agreements (IGAs).

FATCA Status in Malta
IGA in effect since 16 December 2013, Model 1

Malta has FATCA agreement with the U.S. in effect since 16 December 2013 (Intergovernmental Agreement Model 1). Financial institutions operating in Malta are required to identify U.S. taxpayers by January 1, 2017 and to report the information for 2017 and the subsequent years. The agreement is reciprocal: Maltese financial accounts hold in U.S. financial institutions will be reported to Maltese authorities.

Further Information

Financial Market Development

Financial Market Development
4.4 (max 7.0), 43rd out of 138 countries
Banks' Soundness
5.9 (max 7.0), 17th out of 138 countries

According to World Economic Forum's Global Competitiveness Report 2017-2018, financial market development in Malta is scored 4.4 out of maximum 7.0 and ranked 43rd out of 138 analysed economies, trustworthiness and confidence of financial market is scored 4.4 (59th place).

Financial Market Development in Malta.

Chart 5. Financial Market Development in Malta. Source: WEF.


Soundness of banks is scored 5.9 bringing Malta into the 17th place.

Soundness of Banks in Malta.

Chart 6. Soundness of Banks in Malta. Source: WEF.

Further Information

Deposit Guarantee Scheme

Maximum Protected Amount
100 000 EUR

Deposit Guarantee Schemes compensate certain deposits held by depositors of a bank that becomes unable to meet its obligations.

From a depositor's point of view it is important to know:

  • if the depositor is eligible within the terms of the deposit guarantee scheme;
  • if the depositor's bank is a participant in the deposit guarantee scheme;
  • if the depositor's type of deposit is covered by the deposit guarantee scheme.

All these details about deposit guarantee scheme in Malta are summarised in Table 2.

Scheme Participantsall credit institutions operating in Malta, branches of non-EEA banks, branches of Maltese banks abroad
Scheme Exemptionsbranches of EEA-banks (covered by their home countries)
Covered Accountsmost types of deposit are covered, including current, deposit and savings accounts
Maximum Protected Amount100 000 EUR
Paid In Currencyin the same currency as the deposit

Table 2. Deposit guarantee scheme in Malta.

EEA stands for European Economic Area and consists of all EU member states plus Liechtenstein, Norway and Iceland.

Further Information

Country Ceiling for Deposits

Moody's country ceilings for deposits specify the highest rating that can be assigned to local- or foreign- currency denominated deposit obligations of a bank or other deposit taking institution domiciled within that country.

Local Currency (Euro) Foreign Currency
Aaa (prime) Aaa (prime)

Local currency (Euro) deposit ceiling for Malta is set to Aaa (prime), foreign currency deposit ceiling is Aaa (prime).

Deposit Rates

Average Deposit Rate (Aug 2017, EUR)
0.37 %  (Jul 2017: 0.42 %)
In Aug 2017, an agreed annualised deposit rate in local currency (Euro) of new contracts with agreed maturity up to 1 year between credit institutions and households was 0.37% which was above the Euro Area average (0.36%).
Deposit Rates in Malta.

Chart 7. Deposit Rates in Malta. Source: ECB.

Further Information

Banking Sector Structure

Number of Banks
26
Consolidated Assets (2016)
46 384.43 mln EUR  (-1.60%)
Recent Changes (2016)
new banks: 0, closed banks: 1

Currently there are 26 credit institutions operating in Malta.

In 2016 consolidated banking assets in Malta were 46 384.43 mln EUR. The consolidated banking assets' evolution is shown at Chart 8 below.

Consolidated banking assets in Malta.

Chart 8. Consolidated banking assets in Malta.

Recent structural changes (2013 - 2016) of the banking sector of Malta are summarised in Table 3.

2013201420152016
Number of Opened Banks0320
Number of Closed Banks0311

Table 3. Recent structural changes in the banking sector of Malta.

The list of the most recently opened banks in Malta is provided in Table 4.

NameStart Date
 Credorax Bank Limited (new)June 2015
 Yapi Kredi Bank Malta Limited (new)January 2015
 SATABANK plc (new)November 2014
 ECCM Bank plc (new)July 2014
 PILATUS BANK PLC (new)January 2014
 

Table 4. The most recently opened banks in Malta.

All the credit institutions operating in Malta can be classified into several categories. Table 5 summarises the number of banks in each category.

CategoryNumber of Banks
Banks22
Branches of foreign banks3
Central banks1

Table 5. Number of banks by category in Malta.

There are 3 branches of foreign banks from 2 different countries in Malta. Table 6 shows the number of branches grouped by the country of origin.

Country of OriginNumber of Branches
 Turkey2
 Netherlands1

Table 6. Number of branches of foreign banks in Malta grouped by country of origin.

Major Banks of Malta

RankNameTotal AssetsMarket Share
1 Bank of Valletta (BOV)10682.29 mln EUR41.06 %
2 HSBC Bank Malta plc5697.40 mln EUR21.90 %
3 MeDirect Bank (Malta) plc1811.91 mln EUR6.96 %
4 FIMBANK plc1531.15 mln USD5.88 %
5 APS Bank Ltd1285.00 mln EUR4.94 %
6 Lombard Bank Malta plc843.69 mln EUR3.24 %
7 CommBank Europe Ltd.618.00 mln EUR2.38 %
 

Bank of Valletta plc

Bank of Valletta was founded in 1974. In 1992 Band of Valletta became the first public company listed on the Malta Stock Exchange. Bank of Valletta offers personal and business banking products and services insurance services as well as administration and management services to various types of investment funds.

Services
Personal Banking
Business Banking

Bank of Valletta plc is the 1st largest bank in Malta in terms of total assets. In 2016 its total assets were 10 682,29 mln EUR, providing the bank with the market share of 41.06%. In 2016 the bank's net income was 94,18 mln EUR.

Bank of Valletta plc is rated by Fitch. Long-term credit rating assigned to the bank by Fitch is BBB+ (good credit quality). Bank of Valletta plc participates in deposit guarantee scheme of Malta. This scheme covers accounts up to 100 000 EUR per bank per depositor.

HSBC Bank Malta plc

HSBC Bank Malta plc was registered in Malta under the name Mid-Med Bank Limited. In 1993 ordinary shares of Mid-Med Bank were listed on the Malta Stock Exchange.In 1997 the bank changed its legal form to public limited liability company. In 1999 the bank changed its name again to HSBC Bank Malta plc. HSBC Bank Malta plc provides a comprehensive range of financial services including retail banking and wealth management, commercial banking and global banking and markets.

Services
Retail Banking
Wealth Management
Commercial Banking
Global Banking And Markets

HSBC Bank Malta plc is the 2nd largest bank in Malta in terms of total assets. In 2016 its total assets were 5 697,40 mln EUR, providing the bank with the market share of 21.90%. In 2016 the bank's net income was 42,69 mln EUR.

HSBC Bank Malta plc participates in deposit guarantee scheme of Malta. This scheme covers accounts up to 100 000 EUR per bank per depositor.

MeDirect Bank (Malta) plc

Established in 2004, MeDirect Bank (formerly Mediterranean Bank) is a specialist bank, focusing on provision of savings products, and wealth management and investment services.In July 2009, Mediterranean Bank was acquired by a new shareholder - a fund managed by AnaCap Financial Partners LLP, a UK private equity firm, and was recapitalised.

Services
Retail Banking
Corporate Banking

MeDirect Bank (Malta) plc is the 3rd largest bank in Malta in terms of total assets. In 2016 its total assets were 1 811,91 mln EUR, providing the bank with the market share of 6.96%. In 2016 the bank's net income was 11,12 mln EUR.

MeDirect Bank (Malta) plc participates in deposit guarantee scheme of Malta. This scheme covers accounts up to 100 000 EUR per bank per depositor.

FIMBANK plc

FIMBank (before 2003 - First International Merchant Bank) started operations in 1995; in 2001 its shares were listed on the Malta Stock Exchange. FIMBank plc is headquartered in St. Julian’s is a member of one of the biggest diversified holding companies in the Middle East, the KIPCO Group. FIMBank specializes in provider trade finance, factoring and forfaiting solutions, with a global presence in various important financial and trading centres.

Services
Retail Banking
Corporate Banking

Retail Banking Products

FIMBANK plc is the 4th largest bank in Malta in terms of total assets. In 2016 its total assets were 1 531,15 mln USD, providing the bank with the market share of 5.88%. In 2016 the bank's net income was 340 382,00 USD.

FIMBANK plc is rated by Fitch. Long-term credit rating assigned to the bank by Fitch is BB- (speculative). FIMBANK plc participates in deposit guarantee scheme of Malta. This scheme covers accounts up to 100 000 EUR per bank per depositor.

APS Bank Ltd

APS Bank is a Maltese credit institution established in 1910. APS Bank specializes in providing retail banking products and services, including deposit accounts, consumer and mortgage loans. APS Bank also offers corporate banking and wealth management. The major shareholder of APS Bank is the Archdiocese of Malta and Gozo.

Services
Retail Banking
Corporate Banking
Wealth Management

APS Bank Ltd is the 5th largest bank in Malta in terms of total assets. In 2016 its total assets were 1 285,00 mln EUR, providing the bank with the market share of 4.94%.

APS Bank Ltd participates in deposit guarantee scheme of Malta. This scheme covers accounts up to 100 000 EUR per bank per depositor.

Lombard Bank Malta plc

Lombard Bank Malta plc was initially established in Malta in 1955 and was nationalised in 1975. In 1991 the Government of Malta sold its equity in Lombard Bank, which was then listed on the Malta Stock Exchange in 1994. Lombard Bank Malta provides a range of retail, private and corporate banking products and services.

Services
Retail Banking
Private Banking
Wealth Management
Corporate Banking

Lombard Bank Malta plc is the 6th largest bank in Malta in terms of total assets. In 2016 its total assets were 843,69 mln EUR, providing the bank with the market share of 3.24%. In 2016 the bank's net income was 4,53 mln EUR.

Lombard Bank Malta plc participates in deposit guarantee scheme of Malta. This scheme covers accounts up to 100 000 EUR per bank per depositor.

Commbank Europe Ltd

CommBank Europe Ltd is a subsidiary of Commonwealth Bank of Australia, a multi-national Australian bank presenting across Europe, the Americas and Asia-Pacific regions. CommBank Europe Ltd was registered in Malta in 2005 and mainly focuses on infrastructure and utilities solutions, corporate lending and asset finance solutions to its clients in Europe.

Services
Corporate Lending
Asset Finance

Commbank Europe Ltd is the 7th largest bank in Malta in terms of total assets. In 2016 its total assets were 618,00 mln EUR, providing the bank with the market share of 2.38%.

Commbank Europe Ltd participates in deposit guarantee scheme of Malta. This scheme covers accounts up to 100 000 EUR per bank per depositor.

Current Accounts: 1 Offer from 1 Bank

Interest Rates: 0.80 - 0.80 % p.a.
Overdraft Rates: 0.00 - 0.00 % p.a.
Annual Costs: 0.00 - 0.00 EUR

1 current accounts offer from 1 bank operating in Malta are currently available. The interest rates (per annum) are within the range 0.80 - 0.80 %,the overdraft rates (per annum) - 0.00 - 0.00 %, the annual costs - 0.00 - 0.00 EUR.

View All Offers
Lowest Annual Costs Offer: Cuenta Ferratum Bank (Ferratum Bank plc)
Interest Rate: 0.80 % p.a.
Overdraft Rate: 0.00 % p.a.
Annual Costs: 0.00 EUR

Ferratum Bank was incorporated in Malta in September 2012 in order to provide additional funding sources and business opportunities to its parent company, Ferratum Group (Finland). Ferratum Group provides internet and mobile micro-loans, amongst various other services, across a number of countries. It offers fast and readily available banking services, loans and savings both online and on mobile devices.

Savings Accounts: 5 Offers from 1 Bank

Interest Rates: 0.71 - 0.71 % p.a.
Account Terms: 1 - 12 months

5 savings accounts offers from 1 bank operating in Malta are currently available. The savings accounts terms vary from 1 month to 1 years (12 months). The interest rates are within the range 0.71 - 0.71 %.

View All Offers
Highest Interest Rate Offer: Tagesgeld/Flexgeld24 (FIMBANK plc)
Interest Rate: 0.71 % p.a.
Account Term: 1 months

FIMBank (before 2003 - First International Merchant Bank) started operations in 1995; in 2001 its shares were listed on the Malta Stock Exchange. FIMBank plc is headquartered in St. Julian’s is a member of one of the biggest diversified holding companies in the Middle East, the KIPCO Group. FIMBank specializes in provider trade finance, factoring and forfaiting solutions, with a global presence in various important financial and trading centres.

Time Deposit Accounts: 6 Offers from 1 Bank

Interest Rates: 0.45 - 0.85 % p.a.
Deposit Terms: 3 - 36 months

6 time deposit accounts offers from 1 bank operating in Malta are currently available. The time deposit accounts terms vary from 3 month to 3 years (36 months).The interest rates are within the range 0.45 - 0.85 %.

View All Offers
Highest Interest Rate Offer: Festgeld (FIMBANK plc)
Interest Rate: 0.85 % p.a.
Deposit Term: 3 months

FIMBank (before 2003 - First International Merchant Bank) started operations in 1995; in 2001 its shares were listed on the Malta Stock Exchange. FIMBank plc is headquartered in St. Julian’s is a member of one of the biggest diversified holding companies in the Middle East, the KIPCO Group. FIMBank specializes in provider trade finance, factoring and forfaiting solutions, with a global presence in various important financial and trading centres.