Looking ahead at the year which has just started, economic prospects seem positive with decent expectation of growth. This follows on the performance of recent quarters, wherein the country continued to record elevated real GDP growth rates, underpinned by positive developments across many sectors and facilitated by the strong performance in tourist arrivals. Households and most businesses in Malta were shielded from two other major shocks which materialised soon after the COVID-19 pandemic, namely the spike in international energy prices derived from the instability brought about by the war in Ukraine and the rapid increase in interest rates abroad, a measure taken by several Central Banks in a bid to counter inflation. The outlook for the Maltese economy thus remains benign, with real growth likely to converge towards the long-term yearly average of around 4%, which is much higher than that within the Euro area.

Within this context, Bank of Valletta’s commercial banking division under the leadership of newly appointed Chief Commercial Officer, Simon Grech, is ready to explore further opportunities for business growth, as higher economic activity naturally creates demand for new borrowing and ancillary banking services. Businesses will also need support to invest in making their activities more environmentally and socially sustainable, a requirement shaped by new regulation as well as stakeholder expectations.

Mr Grech believes that the Bank, being the largest in Malta, must continue to lead in assisting clients transition to the business world of the future as he explains BOV’s role in supporting the Business community throughout the years. The bank’s mission has contributed in no small way to shaping the Maltese economy since the early years of its existence, as this year marks Bank of Valletta’s 50th Anniversary.

“The commercial banking pillar is a key segment within Bank of Valletta, both from a balance sheet and profitability perspective. With the Bank’s share of commercial lending representing half of the local market, one also needs to appreciate the importance that business banking holds from a national economic framework perspective. Being the largest Bank locally, we can differentiate ourselves not only by being key drivers and enablers in developing the Maltese economy but also and even more importantly by being catalysts of change, supporting emerging sectors which are driven by clean technology and positive social impact.”

Over its 50 years of existence BOV has shaped the local economic landscape, assisting thousands of companies raise millions of Euros for their capital investment as well as a variety of solutions for money transmission and working capital support. Looking ahead, the Bank aims to influence customers in embracing ESG principles.

Leading by example, the Bank has set a target to significantly reduce its carbon footprint by 2030. Mr. Grech explains that “We have already undertaken several initiatives such as reducing the use of paper, installing smart lighting and improving insulation at our renovated branches and Head Office and we are continuously looking for ways to further improve our commitment to a sustainable future. When evaluating business proposals by our customers, we are also pleased to note a trend where local businesses are becoming steadily more aware of the commercial rationale behind ESG, and we feel proud that part of this is also thanks to BOV’s leading role”.

In this regard, 2024 will see the Bank launching interesting products on the market, aiming to further support the business community with a special focus on granting more lending to SMEs and Mid-Caps through attractive financing solutions thanks to a risk-sharing mechanism with the Malta Development Bank (MDB) and the European Investment Fund (EIF). Risk-sharing mechanism often leads to a better interest rate on business loans and a reduced level of collateral requirement, a feature which comes in handy, particularly for startups. This is mainly thanks to the risk-bearing portion being undertaken by both MDB and EIF.

Further incentives are in store for businesses opting for green financing and energy-efficient investment. The Bank has integrated a green loan pricing model for buildings with a lower carbon footprint and for businesses opting to invest or enhance their operations contributing towards a reduction in CO2 emissions.

“Bank of Valletta has been around for half a century, and here’s to another 50 years of supporting the industry. We have backed our businesses time and again, especially during challenging times such as the pandemic, where the granting of additional lending, moratoria and support for badly hit sectors such as the tourism and hospitality industries proved critical for maintaining employment and aiding recovery. We are currently the largest company in the private sector, which in itself comes with a high level of responsibility for leading by example, moreover, we are very conscious of our duty to keep shaping the economy and aiming to remain the bank of choice for our personal and business customers alike.”

Mr Grech has been employed within the local financial services industry since 1985 and during his years in the industry has served in various areas, primarily retail banking, corporate and business finance, risk management and financial crime compliance. In October 2020, he was appointed Head of the Bank’s SME Finance unit. Last month he received regulatory approval from the MFSA following his appointment as Chief Commercial Officer.