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Banking in Malta

From EverybodyWiki Bios & Wiki




The banking sector in Malta evolved through various distinct phases influenced by historical, economic, and political factors.

Timeline

1530–1798 (Knights of St. John)

Informal moneylending by merchants, wealthy families, and religious orders.:[1]

1598: Monte di Pietà founded — provided low-interest loans against pawned items.

1800–1812 (British Protectorate)

1800: Malta becomes a British Protectorate.

23 June 1809: Anglo Maltese Bank — first Maltese formal bank[2]

1 May 1812: Banco Di Malta founded [2]

1812: Monte di Pietà reorganized as Monte di Pietà e Redenzione. Tagliaferro's Bank founded [2]

1813–1964 (British Colonial Period)

1813: Malta becomes a British colony.

1830: Joseph Scicluna et fils. founded [2]

Late 1800s: British banks like Barclays open branches in Malta.

1882 Anglo–Egyptian Bank founded in Malta.[2]

1964–2004 (Post-Independence Era)

1964: Malta gains independence.

1968: Central Bank of Malta established.[2]

1974: Bank of Valletta (BOV) founded after nationalisation of Barclays Malta.

1970s–1980s: Expansion of local retail banking and savings services.

1999: HSBC acquires Mid-Med Bank, becoming HSBC Malta.

2002: Malta Financial Services Authority becomes Malta's financial services regulator, including banking.[3]

2004–Present (post EU membership)

2004: Malta joins the European Union, banking sector aligns with EU regulation.[4]

2008: Malta adopts the euro.

2010s: Growth in international banking, fintech, and compliance reforms.

Recent years: Increased focus on AML compliance, digital banking, and sustainability.

Pre colonial period (Prior 1800)

The Sacred Treasury of the Knights of St. John, known as il Commun Tesoro, carried out financial transactions for the Order through the Chancery and international receivers (ricevitori), who sporadically also rendered services to Maltese traders. Although the Treasury functioned similarly to a financial institution, dealing with import and export operations, establishing exchange rates, and collecting and making payments, it was not a bank but rather an administrative and financial management function within the Knights' operations.[5][6]

On the other hand, the Massa Frumentaria, or Monte Frumentario, was a grain fund responsible for the importation of wheat and foodstuffs administered by the Università, under the supervision of the Knights of St. John.[5][7] The Università was a form of local government composed of local aristocracy responsible for managing the island's civil and economic affairs during medieval times [8][9] and was eventually dissolved in 1819.[10] The Massa Frumentaria operated as a very profitable commercial venture financed by citizens who deposited money into it and who, in return, earned interest rates between 3% and 6%.[7]

Before the French occupation in 1798, its holdings included 123 grain stores containing 75,747 salme* (21.7m litres) of grain, 23 oil vats with 25,431 cafisi (12,715 barrels) of oil, barley stores, markets, shops, and significant real estate valued at approximately 1.8 million Maltese scudi (£150,000 of the time). The average annual profit from corn sales was about 132,000 scudi (£11,000) with ecclesiastical bodies having deposited 1,121,402 scudi (£93,450), while the Order's Exchequer had borrowed 788,066 scudi (£65,672). During Napoleon's occupation of Malta, the French seized all of the assets. During the subsequent Maltese uprising in a letter dated 9 May 1799, General Vaubois, general of the French garrison, threatened the Maltese insurgents with financial ruin if the French lost control of Malta. After the French capitulated on September 5, 1800, General Pigot, leader of the British relief forces, eager to occupy Valletta, neglected to secure the financial interests of the Maltese. Following British occupation, governor Sir Alexander Ball and his successors made many false promises to restore the lost wealth, leaving a lasting financial impact on many Maltese.[7] The confiscation of the assets also resulted in the disruption of food supply to the island, causing around 2,000 fatalities and prompting many others to emigrate abroad following the Knights' departure.[11]

* The salma (plural salme) was a historical unit of volume in Malta, principally used for measuring grain. It equated to 98.5% of an imperial quarter, thus amounting to 286.59 litres. In 1875, the British standardised it to precisely correspond with an imperial quarter, measuring 290.95 litres.[12]

Two other institutions that operated as quasi-banks were the Monte di Pietà and the Monte della Redenzione degli Schiavi. The Monti di Pieta was set up in 1598 and operated as an early banking institution fighting usury, which was prevalent at the time and associated with Jewish moneylenders, by providing loans secured by collateral to individuals in financial hardship, while the Monte della Redenzione degli Schiavi functioned as a fund for ransoming captives taken by Muslims. The two funds merged just before the Knights' expulsion from Malta in 1798.[6][13] Like the Massa Frumentaria, the French despoiled the Monte di Pietà of its assets, valued at 443,484 scudi in 1798. The fund was re-established by the British in 1800 through the advance of £4,000 from the local Treasury.[6] See main article on the Monte di Pietà.

At the turn of the century, a farm labourer's daily income was only about one-third of a scudo, providing some context to the more than 2.2 million scudi looted from the Maltese financial system during the French occupation. (The daily wage of the farm labourer around the beginnings of the 1800s was 6¾ pence.[14] At the time, the British pound sterling was subdivided into 20 shillings, each of 12 (old) pence, making it a total of 240 pence (see Sterling prior to decimalisation), which was also equivalent to 12 scudi [15], meaning that one scudo was equivalent to 20 pence. Hence, a farm labourer would need to work roughly three days to earn a scudo.) The looted funds were never returned.

British Protectorate (1800-1812)

Following the assistance provided to the Maltese in expelling the French in 1800, the Maltese recognised George III as their monarch and requested British protection formally by the Maltese Declaration of Rights in 1802. (See Main Article: Malta as a British Protectorate).

Harbour activity in Malta increased, which included the George Washington, the first American warship to navigate the Mediterranean in early 1801.[16] Valletta emerged as a crucial logistical and diplomatic base for the American forces in their war against North African corsairs, known as the First Barbary War (1801–1805). American warships, such as the USS Constitution, docked in Malta's Grand Harbour to obtain fresh water, supplies, and essential repairs, which enabled the American squadron to maintain its blockade and operations against the Barbary States.[16][17]

In 1806, Napoleon's Continental Blockade disrupted commercial connections between England and several European nations, with British trade routes predominantly redirecting through Southern Europe, particularly Malta. In addition, the island also served as a staging point for the importation of raw materials and commodities from the Barbary States and the Levant to England and to the Austrian States.[18]

Port activity surged between 1805 and 1815, with an impressive average of 1,500 ships visiting Malta every year.[19] The circulating currency used in Malta reflected this international trade, comprising a mixture of Maltese scudi and tari from the era of the Order, Sicilian, Spanish and South American dollars, together with British gold sovereigns and half sovereigns.[19][20][21] Ironically, the surge in commercial activity partially reversed the poverty and destruction caused by the Maltese insurrection against French control a few years earlier.[16]

The foundation of institutional banking on the islands coincided with Malta becoming a British protectorate after 1800 and this period of economic prosperity. The first Maltese bank, the Anglo Maltese Bank, was formed on 23 June 1809 by Maltese and British merchants, under the governance of Sir Alexander Ball.[2][16][19][22] This was followed on 1 May 1812 by the Banco Di Malta, which was also known as Banco Maltese.[2][16][19][22][23] The list of shareholders of the Banco di Malta included historian Onorato Bres and Vincenzo Borg, the head of the Maltese battalion against the French during the Siege of Malta.[23]

These were followed by the family-run banks Tagliaferro's Bank also in 1812 and Scicluna's Bank in 1830, contributing further to commercial and financial growth.[19] Biagio Tagliaferro, a Genoese merchant, operated a corporate entity, B. Tagliaferro e Figli, with operations in Genoa, Naples, Odessa, and Valletta.[22][23] While Scicluna's Bank, which was established by Marquis Giuseppe Scicluna, disbursed salaries to its employees by cheque. The bank was popularly known as "il-Bank taċ-Ċisk" from the corruption of the word cheque.[24]

Documents indicate that the British managed the economy to persuade the Maltese towards British annexation.[5][13][25] In 1813, Malta was established as a British Crown Colony, a designation formally ratified by the Treaty of Paris in 1814.

British Colonial Rule (1813-1964)

Up to November 1833, all banks in Malta were commercial banks until the formation of the Malta Government Savings Bank. This entity was formerly established as the Provvido Banco Maltese per Risparmi (Maltese Provident Bank for Savings) to encourage savings and provide financial services to the public under the patronage of Archbishop Francesco Saverio Caruana. It started with eight depositors on 4 January 1834, which increased to 180 by the end of the year. It operated alongside the Monte di Pietà between 1838 and 1848. On December 25, 1848, both institutions were taken over by the government and continue, although in somewhat reduced capacity, to the present day as Monti di Pieta. The Bank also opened a branch in Gozo on 1 June 1853.[13][19][22][26][27]

Anglo Egyptian Bank Ltd opened a branch in Valletta in 1864 and in 1925 merged with the National Bank of South Africa and the Colonial Bank to establish Barclays Bank Dominion Colonial Overseas, later rebranded as Barclays Bank D.C.O and ultimately as Barclays Bank International. The presence of foreign banks reflected the island's growing integration into international finance.[10][22]

During the 19th century, prosperity in Malta started to shift away from international trade and become more dependent on British military expenditure. With the opening of the Suez Canal in 1869, Malta became a strategic node connecting Britain to the Far East. Until the 1880s, Malta served as a very important coal-bunkering station, leading to a peak of incoming shipping. However, more efficient steam engines eventually enabled ships to bypass Malta.[26]

The strategic military importance led to major harbour works, culminating in the building of the Grand Harbour breakwater between 1903 and 1910.[26]

Pope Leo XIII's 1891 Rerum Novarum defined the late nineteenth century Catholic social doctrine.[26][27][28] This led to a Jesuit priest Fr Michael Vella forming the Unione Cattolica San Giuseppe, as part of the Jesuit-run Apostleship of Prayer at the Oratory of St Philip Neri in the Jesuit church in Valletta on Sunday, 8 May 1910. One of the first initiatives was the creation of a savings bank, the Bank of Apostleship of Prayer or Bank ta’ San Guzepp, modelled on similar institutions in Lyon and small Italian cities to encourage the working classes to save part of their income.[22][27][29] The bank was promoted by the clergy, who received deposits on its behalf in many churches around Malta.[27][30] The bank was quite successful until the advent of World War II, when deposits dwindled and the structure broke down. In November 1947, the bank, was transferred to the Archdiocese of Malta.[10][27]

The entire banking sector faced significant challenges during World War II, including disruptions and closures, but recovered post-war. The Anglo Maltese Bank and Banco di Malta merged in 1946 to form the National Bank. Scicluna's Bank and Tagliaferro's Bank also joined this new National Bank in 1949. The bank was regarded as a leading financial institution of the time with an expanded branch network and financing several substantial planned projects in post-independence Malta.[23][22][29][31]

Lombard Bank, founded in 1955.[29]

Post Independence (1964 onwards)

The Central Bank of Malta was established in 1968 to regulate and oversee the financial system.

The National Bank was nationalised following a run on its reserves in December 1972, instigated by substantial withdrawals from government-owned enterprises.[32] The Bank of Valletta (BOV) commenced operations on 25 March 1974 after assuming the assets and liabilities of the National Bank Group.[22]

Mid-Med Bank was established in 1975 following the nationalisation of Barclays Bank International's activities in Malta by the socialist government.[10][22]

The two bank nationalisations preceded another banking crisis. The Bank of Industry, Commerce and Agriculture Ltd, which was set up in 1963 by Cecil and Henry Pace and known as BICAL, collapsed in November 1972. Its collapse in the 1970s highlighted significant issues in banking governance and regulation. The process, which was marked by controversies and legal disputes.[29][33]

Thus in the 1970s, the banking sector became practically state-controlled.

The Bank of Apostleship of Prayer changed its name to APS Bank Ltd after being granted a commercial licence in 1990.[10][30] Its shareholders, the Malta and Gozo dioceses subscribed to the bank's plans and agreed to a Lm4 million (€9.3 million) capital injection, raising the bank's capital to Lm6 million (€13.9 million). The bank evolved into a cost-effective financial institution with a focus on personal banking.[22] The bank is also a member of the European Federation of Ethical and Alternative Banks (FEBEA), an association of financial institutions with a social and environmental focus.[30]

In 1999, Midland Bank acquired 67.1% of the direct holdings of the Government of Malta. Upon rebranding Midland Bank as HSBC Bank, Mid-Med was transformed into HSBC Malta Plc.[10][22] In September 2025, HSBC Continental Europe, the parent company, agreed to sell its 70.03% holding to Greece's CrediaBank (formerly Attica Bank) for €200 million.[34]

European Union membership (2004–Present)

Malta joined the European Union (EU) in 2004.[4] In preparation for EU membership, on 23 July 2002, the Malta Financial Services Authority (MFSA) was established as an autonomous public institution as the single regulator for financial services in Malta, handling some of the functions previously performed by the Central Bank of Malta, the Malta Stock Exchange and the Malta Financial Services Centre.[3]

Since then, Malta's banking system has grown from four retail banks serving the local community to 19 licensed banks and two international bank branches in 2023 [35]

Core Non-Core Total
Domestic Domestic International
Banks Banks Banks
Number of Banks 6 6 9 21
APS Bank FCM Bank AKBANK T.A.S.
Bank of Valletta FIMbank Credorax Bank
BNF Bank IIG Bank ECCM Bank
HSBC Bank Malta Izola Bank Lidion Bank
Lombard Bank Mercanti Bank Multitude Bank
ME Direct Sparkasse Bank Malta Novum Bank
Turkiye Garanti Bankasi AS
Branches:
Credit Europe Bank N.V.
European Depositary Bank SA
Assets (€ billion) €28.48 €3.42 €10.09 €41.99
Share of Assets 68% 8% 24% 100%

Malta's banking sector, a major economic pillar, contributed 6.2% of the country's Gross Value Added in 2022, significantly higher than the Eurozone average of 2.8% and employs about 5,400. The €42bn held in assets is equivalent to 249% of Malta's GDP.[35]

A global financial crisis in 2008 exposed flaws in the international financial sector. The European sovereign debt crisis followed, highlighting difficulties of some EU countries to refinance their government debt or to bail out banks under their national supervision. In 2012, the European authorities embarked on creating a banking union, of which Malta forms part.[36][37][38][39]

See also List of banks in Malta.

Other EU banks are also able to operate in Malta. The most successful is probably Revolut, which operates as a fully licensed online bank, Revolut Bank UAB, providing services to over 190,000 Maltese customers as of 2021. It is regulated by the Bank of Lithuania and the European Central Bank.[40]

Recent scandals

Pilatus Bank Plc was a bank established in 2013 to provide private and commercial banking services to high net-worth individuals and was closed down in 2018, after major local and international money laundering scandals.[41][42] The bank was also involved in major local political controversies involving former energy minister Konrad Mizzi, former OPM chief of staff Keith Schembri, and businessman and murder suspect Yorgen Fenech.[43][44][45][46] (see Pilatus Bank)

In 2018, the European Central Bank also withdrew the licence of another bank, Satabank, which was only inaugurated in 2016, after the Malta Financial Services Authority froze its 12,000 bank accounts as it investigated alleged money-laundering breaches.[47]

References

  1. ↑ Abela, Joan Angela (2012). "The Impact of the Arrival of the Knights of the Order of St John on the Commercial Economy of Malta 1530-1565".  University of Exeter (United Kingdom) ProQuest Dissertations & Theses.
  2. ↑ 2.0 2.1 2.2 2.3 2.4 2.5 2.6 2.7 Jens Rudolf, Uwe (2018). Woronoff, Jon, ed. "Historical Dictionary of Malta". dokumen.pub (3rd ed.). Rowman & Littlefield. pp. xxxiii, xxxviii, 37. ISBN 9781538119181. LCCN 2018027919. Retrieved 2025-08-07.
  3. ↑ 3.0 3.1 "About The MFSA". Malta Financial Services Authority. Retrieved 2026-02-22.
  4. ↑ 4.0 4.1 European Commission (2019-04-30). "Growing together: EU support to Malta that joined in 2004". Retrieved 2026-02-22.
  5. ↑ 5.0 5.1 5.2 Debono, Jeremy (2015). Treasury C : a re-discovered archive at the National library (Bachelor thesis). University of Malta.
  6. ↑ 6.0 6.1 6.2 Grima, Joseph F. (2019-06-16). "It happened this month: Malta's first bank". Times of Malta. Retrieved 2025-04-21.
  7. ↑ 7.0 7.1 7.2 Arthur, Bonnici (1969). "A Debt that was never settled" (PDF).
  8. ↑ Manduca, J.; Mizzi, L.; Scerri, J.; Mangion, T.; Dalli, Charles; Fiorini, Stanley; Ganado, Albert (1993). The making and unmaking of the Maltese Universitas. Midsea Publications. Search this book on
  9. ↑ Hoppen, Alison (1980). "The fortification of Malta, 1530-1798 : the impact on the Maltese". Hyphen. 2 (3): 103–114.
  10. ↑ 10.0 10.1 10.2 10.3 10.4 10.5 Rudolf, Uwe Jens (2018-11-10). Historical Dictionary of Malta. Rowman & Littlefield. pp. xxxiii, 36. ISBN 978-1-5381-1918-1. Search this book on
  11. ↑ Savona-Ventura, Charles (1998). "Human suffering during the Maltese insurrection of 1798". Storja (1998): 48–65.
  12. ↑ Zarb-Dimech, Anthony (2023). "Part 1: Malta Maritime History: B. Tagliaferro e Figli - The Malta Independent". www.independent.com.mt. Retrieved 2025-04-27.
  13. ↑ 13.0 13.1 13.2 Rudolf, Uwe Jens; Berg, Warren G. (2010-04-27). Historical Dictionary of Malta. Scarecrow Press. p. 35. ISBN 978-0-8108-7390-2. Search this book on
  14. ↑ Clare, Arthur G. (1981). "Features of an island economy : Malta 1800-1914". Hyphen. 2 (6): 241.
  15. ↑ MALLIA‐MILANES, V (1988). The British Colonial Experience 1800‐1964: The Impact on Maltese Society. Mireva Publications. p. 135. Search this book on
  16. ↑ 16.0 16.1 16.2 16.3 16.4 Frendo, Henry (2002). "Ports, ships and money : the origins of corporate banking in Valletta". Journal of Mediterranean Studies. 12 (2): 327–350.
  17. ↑ American Naval Records Society (2011). "Naval Documents related to the United States Wars with the Barbary Powers Volume V Part 1 of 3" (PDF).
  18. ↑ D'Angelo, Michela (2007). "British Trade and Merchants in the Mid-Mediterranean: An Alternative Market during the Napoleonic Wars". Anglo-Saxons in the Mediterranean. Commerce, Politics and Ideas (XVII-XX Centuries): 97–114. ISBN 9781397899903.
  19. ↑ 19.0 19.1 19.2 19.3 19.4 19.5 Consiglio, John (1983). "Breve Storia Bancaria Moderna di Malta" (PDF). University of Malta.
  20. ↑ Central Bank of Malta. "Coinage in Malta, 2,500 years of history" (PDF).
  21. ↑ Times of Malta (2008-01-01). "Brief history of Malta's money". Times of Malta. Retrieved 2025-04-19.
  22. ↑ 22.00 22.01 22.02 22.03 22.04 22.05 22.06 22.07 22.08 22.09 22.10 Borg, Darren (2022-01-25). "History of Banking and Banks in Malta". DW&P Dr. Werner & Partners. Retrieved 2025-04-01.
  23. ↑ 23.0 23.1 23.2 23.3 Fenech, Natalino (2006-01-27). "The history of banking". Times of Malta. Retrieved 2025-04-01.
  24. ↑ Schiavone, Michael (2024-02-21). "Biography: Giuseppe Scicluna (Senior), sive 'iċ-Ċisk'". Times of Malta. Retrieved 2025-04-09.
  25. ↑ Bartolo, Paul (1980). "British colonial budgeting in Malta: the first formative decades 1800-1838". Melita Historica. 8 (1): 1–22.
  26. ↑ 26.0 26.1 26.2 26.3 Grima, Joseph F. (2025-05-05). "The Unione Cattolica San Giuseppe's founding in 1910 - forerunner of APS Bank". Times of Malta. Retrieved 2025-05-07.
  27. ↑ 27.0 27.1 27.2 27.3 27.4 Grima, Noel (2017-02-13). "The founder of APS Bank". The Malta Independent. Retrieved 2026-02-09.
  28. ↑ "Rerum Novarum | Catholic Social Teaching, Labor Rights, Social Justice | Britannica". www.britannica.com. Retrieved 2025-05-07.
  29. ↑ 29.0 29.1 29.2 29.3 Bonello, Giovanni (2025-03-31). "In pictures: Early banking in Malta". Times of Malta. Retrieved 2025-04-01.
  30. ↑ 30.0 30.1 30.2 Ripard, Joanna (2010-01-24). "APS Bank embarks on ethical international finance dimension". Times of Malta. Retrieved 2026-02-09.
  31. ↑ Frendo, Henry (1999). The Origins of Maltese Statehood (PDF). BDL Ltd. p. 383. ISBN 99932-0-035-2. Search this book on
  32. ↑ "Court orders €111 million compensation to National Bank of Malta shareholders". The Malta Independent. 2024-03-27. Retrieved 2025-04-01.
  33. ↑ Rudolf, Uwe Jens; Berg, Warren G. (2010-04-27). Historical Dictionary of Malta. Scarecrow Press. p. 37. ISBN 978-0-8108-7390-2. Search this book on
  34. ↑ "Looking forward 2026 | End of an era: HSBC Malta will change hands". MaltaToday.com.mt. Retrieved 2026-02-11.
  35. ↑ 35.0 35.1 Ernst and Young (2024). "The Future of Banking in Malta" (PDF). Malta Bankers' Association.
  36. ↑ "The ECB publishes final list of significant credit institutions for Malta and other EU jurisdictions". The Malta Independent. 2014-09-12. Retrieved 2026-02-22.
  37. ↑ "The banking union: what is it and how does it benefit us?". Banco de España. 2023-11-15. Retrieved 2026-02-22.
  38. ↑ European Central Bank (2024). "Milestones".
  39. ↑ Central Bank of Malta and Malta Financial Services Authority (2025-08-14). "2026 Statement of Decision on the Identification of Other Systemically Important Institutions and the Related Capital Buffer Calibration" (PDF). Central Bank of Malta.
  40. ↑ "Revolut launches as a bank in Malta, now offers protected deposit accounts". The Malta Independent. 2021-02-18. Retrieved 2026-02-22.
  41. ↑ Chandrasekhar, Anand (2019-06-26). "Pilatus accused of paying millions to secure Indian defence contract". SWI swissinfo.ch. Retrieved 2025-01-16.
  42. ↑ Garside, Juliette; Kirchgaessner, Stephanie (2018-04-23). "Azeri ruling families linked to secret investments via Maltese bank". The Guardian. ISSN 0261-3077. Retrieved 2025-01-16.
  43. ↑ Bonnici, Julian (2021-03-26). "Keith Schembri Opened Pilatus Bank Account Weeks Before Alleged Transfer On Passport Kickbacks". Lovin Malta. Retrieved 2025-01-16.
  44. ↑ Borg, Jacob (2022-01-30). "Company in 17 Black cash trail received 'suspicious' Pilatus funds". Times of Malta. Retrieved 2025-01-16.
  45. ↑ "Pilatus whistleblower claims Azeri billionaire is behind 17 Black". Retrieved 2025-01-16.
  46. ↑ Balzan, Jurgen. "Keith Schembri, Konrad Mizzi to face criminal charges over 17 Black". Newsbook.
  47. ↑ "A short life for another local bank". Times of Malta. 2020-07-04. Retrieved 2026-02-11.


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