2023 sees 151 BOV employees graduate

Celebrating our direct investment in our people and the quality of service offered to our customers

Bank of Valletta celebrated with its people during a formal Graduation event that was attended by the Bank’s senior management, including Chairman Dr Gordon Cordina and CEO Kenneth Farrugia. Aptly named Proud of Our People, the event was the culmination of a year of online and in-person training programmes driven by the Bank’s Learning and Development Centre. The evening saw 151 employees graduating in a broad spectrum of awards and qualifications, all of which are recognized by the Malta Further & Higher Education Authority and are qualified under the Maltese Qualified Framework in MQF Levels 5 and 6.

In his brief opening address, Dr Gordon Cordina expressed his delight at witnessing the breath of learning opportunities made available by the Bank, both in-person as well as through the self-learning platform, and the keen response of its people, with several courses being overbooked within days or even hours of being launched. He went on to explain that “providing training is only one important facet of our people’s development. There is also a collective responsibility among senior management and team leads to ensure that our people are finding their jobs challenging and rewarding, whilst we approach learning with humility, grateful for the opportunities to improve ourselves and generous in sharing our knowledge with our peers.”

Speaking during the event, Kenneth Farrugia explained that the Bank recognizes the sacrifice put in by its people to pursue their studies while working full-time. In addition to the 1,100 employees who attended in-house courses, over 700 employees have attended or are attending external courses and reading for different qualifications during 2023. “As a Bank that aspires to be the Employer of Choice, we understand that our biggest asset is human capital. In a bid to truly be a learning organisation, we choose to invest in our people, through various initiatives including study grants, with 2023 seeing over 100 applications approved.” In addition, the Bank supports its people through both study loans and study leave. Referring to the Bank’s customer-driven strategy, Mr Farrugia emphasized that the Bank’s strategy hinges on its people, who are the fulcrum of its drive in various fields, including business, risk management and governance, as well as its operations and support functions.”

Ray Debattista, Chief People and Culture Officer, also addressed the new graduates, outlining the different initiatives undertaken by the Bank to strengthen its position as the Employer of Choice, through investment in technology as this year saw the Bank launching a new interactive online learning platform, and designing new courses in response to market needs, including a brand new onboarding programme. He also mentioned the Bank’s suite of benefits, both financial such as the Bank’s voluntary occupational pension scheme and non-financial like the different family-friendly measures in place, and the Bank’s Brain Waves programme that encourages people from across the organisation to put forward their recommendations and rewards them. He concluded by saying, “As an organisation, we have changed and we shall continue to change and evolve because we need to remain relevant, leaders and catalyst of change.” He reiterated his belief that the Bank’s future success is underpinned by the hundreds of people who continue to drive change and improve themselves and the service offering to our customers.”

During the brief event, every employee present received a commemorative certificate. This was followed by a toast led by Dr Tania Camilleri from the Learning & Development team. A small reception for graduates and management followed.

Untangling EU Climate and Energy Policy

MBB publication offers overview of EU Fit For 55 outcomes

The Malta Business Bureau has published a detailed report on the outcomes of the negotiations on the Fit For 55 package. The latter includes a set of EU proposals issued in 2021 by the European Commission to accelerate the bloc’s efforts to achieve their ambitious climate targets. The proposals were put forward in line with the EU Green Deal.

The package aims to introduce several new policies, while reforming existing ones, with the aim of reducing greenhouse gas emissions by at least 55% below 1990 levels by 2030. Measures tackle various high emitting sectors and industries, such as energy production, transport, buildings, and industry.
New rules are poised to bring significant changes to the way businesses operate. Understanding these changes will be crucial for businesses to adapt their strategies and ensure long-term sustainability. To this end, the MBB compiled a comprehensive report to supply valuable insights into the implications for businesses.

Commenting on the launch, MBB President Alison Mizzi said “The Fit For 55 package will bring about changes for businesses to meet our collective climate targets. In the last years, businesses have experienced a barrage of new legislation which is difficult to keep track of, especially for SMEs. We trust that this publication will serve as a useful tool to decipher the complex web of EU climate policies and identify the potential impact of the new legislation in the coming years.”

The publication provides an overview of new rules concerning energy efficiency, renewable energy, sustainable fuels, transport, energy taxation, and carbon pricing.

On energy, the focus is placed on increasing the share of renewable production and significantly increasing energy efficiency. Likewise, building owners and industry will be expected to gradually increase the energy efficiency of their operations through, for instance, more efficient equipment and building renovation, while increasing investment in greener energy onsite.

Aviation and maritime operators will be expected to gradually shift towards the use of sustainable fuels and embrace greener practices such as connecting to onshore power supplies and only carrying the fuel required to complete a trip to avoid excess weight.

The sale of new Internal Combustion Engine (ICE) cars shall be banned as from 2035 to reduce the environmental impact of road transport. At the same time, the use of carbon-based fuels across various sectors will be gradually disincentivized through higher taxes and other costs.

Significant challenges and opportunities arise from the Fit For 55 package legislation. While many businesses are in favour of a stronger green agenda, concerns over competitiveness, rising costs, and the impact on small peripheral member states, have also been put forward.

The new rules will be gradually implemented over the next years. For more detailed information and to view the full publication visit www.mbb.org.mt.

The Malta Business Bureau is the EU business advisory organisation of The Malta Chamber and The Malta Hotels and Restaurants Association. It is also a partner of the Enterprise Europe Network.

New Action Plan Aims to Strengthen Malta’s R&I in Energy and Climate Efforts

The Energy & Water Agency, The Malta Chamber, and The Malta College of Arts, Science & Technology (MCAST), as part of the Mediterranean Island Cleantech Innovation Ecosystem (MICIE) project, have co-published a Research & Innovation Action Plan for Malta to help guide towards better coordination and growth of R&I in the face of local climate and energy challenges. This plan has been developed within the context of this project and shall now seek financial support and endorsement from the Maltese government. The MICIE Project was created with the aim of strengthening the contribution of R&I in achieving the climate and energy targets of Malta and Cyprus as defined in their National Energy and Climate Plans (NECP).

NECPs are long-term plans that outline how EU member states intend to meet the energy and climate targets for 2030. The plans cover areas such as energy efficiency, renewables, greenhouse gas emissions reductions, interconnections, and R&I. NECPs provide a level of planning that will ease public and private investment and require coordination across all government departments. An updated NECP for Malta is expected to be submitted in 2024.

The Malta R&I Action Plan presented today proposes three cross-cutting actions which were identified as a result of several stakeholder engagement workshops carried out on the theme of Energy and Climate. Participating stakeholders ranged from policy makers and implementors, civil society groups, education and research institutions, funding providers, businesses, and the public.

The first action being presented is the identification of R&I testing facilities. This involves the following core tasks; identifying suitable locations for onshore and offshore facilities for the testing of renewable technologies, assessing the necessary policy framework for the creation of these facilities, and evaluating the need for a regulatory sandbox. The latter is being proposed to be carried out jointly with Cyprus to tackle a common deficit and promote international collaboration within R&I.

The second action developed through the stakeholder workshops is the proposal for the development of an open science database. The first task under this action is to identify and engage potential data providers and users to identify database requirements, including hosting and infrastructure requirements. It is likewise considered necessary to study what structure for data warehousing is best suited for an open science database and any frameworks required for data sharing, integration, and maintenance. This will then be followed by the actual design and development of the database.

Strengthening the local researcher workforce is the final action being proposed within the Action Plan. This action primarily involves the strengthening of collaboration between public, academia, government and industry through dedicated events promoting R&I in energy and climate, and the continuous assessment and improvement of existing schemes. The action also considers bolstering the local researcher workforce through collaborative programmes with other EU member states, supporting younger researchers in their studies, and assessing mechanisms to attract international researchers to collaborate locally on priority projects for Malta were also identified as key tasks under this action.

This MICIE project is funded by the Horizon Europe Framework Programme for Research and Innovation of the EU. It is a collaboration between the Cyprus Institute of Technology, the Cyprus Energy Agency, EIT Climate-KIC, the Deputy Ministry of Research, Innovation, and Digital Policy of Cyprus, the Cyprus Employers and Industrialists Federation, the Malta College of Arts, Science & Technology, the Energy & Water Agency, and The Malta Chamber.

For more information on the Action Plan and Guidebook please visit the project website.

BOV sells portfolio of non-performing loans

Bank continues to strengthen its capital and liquidity buffers

Bank of Valletta today announced that, following a strategic review of its book of non-performing loans, it has sold a portfolio of non-performing loans (the “Portfolio”) for a consideration of €26 million with a view to strengthening the Bank’s capital and liquidity buffers, and to ensuring that the Bank’s resources are focused on servicing loans with a better prospect of recoverability.

Supported by external advisors, the Bank selected the Portfolio using pre-defined criteria. The Portfolio is comprised of 707 non-performing loans (“NPLs”) across 245 borrowers, the majority of which have been granted commercial loans to finance business activities across a number of different industries. The Portfolio also includes personal loans, credit card loans, home loans, encroached savings and current accounts and other debts. The Portfolio is significantly biased towards loans and facilities that have been in default for a long period of time, with 90% of the Portfolio comprised of loans and facilities that have been in default for 5 years or longer.

The primary purpose of the transaction is to generate income from NPLs which may have either been completely written off or provided for, in large part, in previous years.

The current net book value of the Portfolio reported in the Bank’s balance sheet is in the region of €5 million. In this regard, the transaction is expected to have a positive impact of approximately €18 million on the Bank’s profitability for financial year 2023, representing the difference between the accumulated expected credit loss (provisions) and the actual realised loss following the transaction. The amount of €18 million realised in 2023 is net of a provision of €2 million representing potential liabilities arising from the acquirer’s right to make a claim for compensation under certain specific circumstances in terms of the assignment agreement.

The transaction will also improve the Bank’s NPL-ratio in line with regulatory requirements, aligning itself better to peer European banks. In addition, the transaction is expected to render other benefits to the Bank, such as an improvement in the asset quality of the Bank’s credit portfolio as well as removing the need for further provisioning against these debts. The transaction will also improve the Bank’s operational efficiency due to a release of resources which are currently dedicated to lengthy debt collection processes, court proceedings and the ongoing management of the collateral held by the Bank, including their eventual disposal.

The Portfolio was sold by way of assignment to a Malta-registered public limited liability company established as a securitisation cell company in terms of the Securitisation Cell Companies Regulations (Subsidiary Legislation 386.16, laws of Malta). As a result of the transaction, the acquirer has replaced the Bank as creditor in respect of the relevant NPLs.

Understanding the liability waiver in the Digital Services Act: Implications for businesses

The Digital Services Act (DSA)*, a landmark regulation of the European Union, is set to strengthen the digital landscape in Europe.

The DSA provides for a liability waiver for intermediary service providers, a concept that has its roots in the eCommerce Directive’s Article 14, established in 2000.

This waiver stipulates that providers are not liable for information stored at a recipient’s request, provided they swiftly act to remove or disable access to the information once they become aware of its illegal nature. The DSA evolves this principle, offering more detailed guidelines and widening the scope to encompass a broader range of digital services.

Providers of intermediary services, as defined by the DSA, include those offering ‘mere conduit’, ‘caching’, and ‘hosting’ services. This article focuses predominantly on ‘hosting’ providers that store user-generated content. This category encompasses a wide variety of services, including website hosting services, online marketplaces, booking platforms, search engines, and social media platforms. These providers face more comprehensive obligations.

The liability waiver under the DSA presents a protective layer for businesses. This means that if your business hosts user-generated content, you are not automatically responsible for illegal content posted by users, on condition that it is removed swiftly upon notification or discovery.

This protection is critical for providers as it enables user interaction, such as reviews, comments and marketplaces, safeguarding businesses from legal actions that could result in severe fines or civil liabilities.

Moreover, the waiver impacts innovation and competition positively. By reducing the legal risks associated with hosting user-generated content, the DSA incentivises providers, particularly start-ups and small enterprises, to innovate without the overshadowing threat of litigation.

This encourages a competitive environment where the focus is on service enhancement.

However, the liability waiver is not an all-encompassing shield. It mandates businesses to establish accessible and straightforward mechanisms for reporting illegal content or behaviours and to provide detailed explanations, referred to as statement of reasons, when deciding to remove or disable content.

These stipulations aim to ensure that while providers are shielded from liability, they also uphold a level of responsibility.

Furthermore, the DSA introduces measures for dispute resolution, fostering a fairer and more transparent process. If users dispute the removal of content, they can avail of the provider’s internal complaint-handling system. Should this not resolve the issue, further legal redress is available.

This multi-tiered approach is designed to ensure accountability while preventing unjust penalisation without due process.

With the DSA set to be fully enforced in Malta on 17th February 2024, the Malta Communications Authority is set to be appointed as the Maltese Digital Services Coordinator (DSC).

Before this date, businesses are encouraged to review their practices to ensure compliance with the DSA.

It is advisable to audit existing content moderation procedures, update reporting mechanisms, and review the processes for responding to notifications of illegal content. Preparing ahead will help ensure a smooth transition to the new regulatory environment.

Businesses seeking further information are encouraged to reach out to the Malta Communications Authority via email at info@mca.org.mt.

*Regulation (EU) 2022/2065 of the European Parliament and of the Council of 19 October 2022 on a Single Market for Digital Services and amending Directive 2000/31/EC.

EU Fights Greenwashing Through Green Claims Proposal

MBB Webinar Discusses EU Green Claims Directive

The Malta Business Bureau organised an information and consultation session with businesses on the EU’s proposal for a ‘Green Claims’ Directive. The proposal aims to combat greenwashing by obliging companies to substantiate and independently verify environmental claims they make about their consumer products and services.

According to the proposed rules, business would have to substantiate their claims against a set of tangible criteria. This includes specifying whether the claim applies to the whole product or service or just a part of it, providing scientific evidence to back up the claim, demonstrating significant environmental impacts from a lifecycle perspective, and other criteria. Even more stringent requirements are being proposed for claims which compare products and services with those of other competitors, to ensure fairness.

MBB President Alison Mizzi commented that, “businesses are voluntarily investing in initiatives which improve the efficiency of their operations and reduce their environmental impact. At the same time, there has been a rise in claims which are somehow vague or very difficult to quantify in practice. Such claims make it challenging for consumers to reliably compare between sustainability credentials and creates an uneven playing field at the expense of companies which invest to properly substantiate their claims.”

MBB EU Policy Manager on Sustainability Gabriel Cassar provided an overview of the proposal’s main elements and what they mean for businesses in practice. He explained how the proposal goes further by also obliging companies to independently verify the substantiation of environmental claims.

A national body in each member state will be tasked to accredit verifiers to carry out such assessments. Verifiers must be independent from the businesses they are supplying their services to and must have the appropriate qualifications and infrastructure to carry out verification. Mr. Cassar adds that upon successful verification of a claim, a conformity certificate would be awarded to the businesses making the claim, which can be used anywhere in the EU.

MEP Cyrus Engerer delivered an intervention to highlight his priorities on this proposal as Co-Rapporteur for the ENVI committee within the European Parliament. Salient issues include regular revisions of environmental labelling schemes, incentivizing the use of primary information, and clarifying vague terms in the proposal, among others.

MHRA CEO Andrew Agius Muscat expressed their support in principle for the Green Claims Directive, to properly recognize the work of genuine organisations which believe in sustainability. Mr Agius Muscat stressed the need to minimize bureaucracy, support SMEs, monitor costs, and to afford appropriate transition periods for businesses to adapt to the new requirements.

The Malta Chamber Policy Executive (Sustainability) Gabby Grech Larsson delivered the organisation’s perspective on the proposal, seeing it as a keyway to ensure the proper scientific substantiation of environmental claims and prevent greenwashing. Ms Grech highlighted how recent EU data shows that almost half of green claims are completely unsubstantiated.

Environmental labelling schemes have emerged as an attractive avenue for businesses to promote the sustainability credentials of their products and services. To avoid the promotion of excessive unregulated schemes, the Commission is proposing a ban on new schemes by member states. Existing schemes, and schemes from outside the EU may be allowed if they comply with the requirements under this Directive and are approved by the Commission.

The proposal for a Green Claims Directive is a key file to further reliable information to consumers in the green transition. The MBB has been working closely with national and EU policymakers to put forward the views and concerns of Maltese businesses. Those interested in further information are encouraged to contact the MBB EU policy team on infobrussels@mbb.org.mt.

The Malta Business Bureau is the EU business advisory organisation of The Malta Chamber and The Malta Hotels and Restaurants Association. It is also a partner of the Enterprise Europe Network.

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The Malta Chamber hosts European Court of Auditors Delegation Focus on EU expenditure outcomes

A delegation from The Malta Chamber of Commerce, Enterprise and Industry met with Dr George Marius Hyzler, Malta’s Member at the European Court of Auditors (ECA), as he presented the 2022 annual report. The meeting discussed the assessment of European Union expenditure, its effectiveness on the ground for business and the court’s audit timelines which typically extend to just over a year with an annual average of 25 to 30 special reports published, together with the annual report on the Statement of Assurance.

Dr Hyzler also referred to the two ongoing audits for which he is Reporting Member: the Cohesion Action for Refugees in Europe and State aid in times of crisis.

During the meeting, one of a series that he is currently holding in Malta, Dr Hyzler highlighted that, “an effective audit institution is essential for citizen and business trust in the EU.” He provided a comprehensive overview on ECA’s activities which are often not sufficiently known by the general public.

Acknowledging Dr Hyzler’s dedication, The Malta Chamber expressed its appreciation towards his work, commending him on his recent appointment as the Chairperson of the ECA Ethics committee within his first year of tenure.

The Malta Chamber delegation recognised the institution’s approach to monitoring the EU’s revenue and expenditure. The Malta Chamber President Chris Vassallo Cesareo and CEO Dr Marthese Portelli together with a number of Council members, articulated key perspectives which regularly emanate from the Maltese business community towards the functioning of the European Union. The Malta Chamber delegation emphasised the importance of ensuring that all member states are on the same level playing field in accessing the single market, particularly the element of competitiveness from the perspective of a micro island state at the periphery of the continent. Regulatory proportionality and the adverse effects of overregulation on business were two important themes which were discussed during this meeting; as well as the relevance of Malta’s Recovery and Resilience Plan to the business sector.

In conclusion, The Malta Chamber reiterated the importance of alignment on matters of principle and confirmed its commitment to support ethical business, whilst applauding the independent, professional and impactful audit work being carried out by the ECA.

BNF Bank achieves Third-Country Branch Authorisation in the United Kingdom

BNF Bank p.l.c. has been approved to operate a third-country branch in the United Kingdom, the only local bank that has been licenced to do so. BNF was authorised by the Prudential Regulation Authority (PRA), within the Bank of England, with the consent of the Financial Conduct Authority (FCA).

Consequently, as a dual regulated firm, BNF Bank p.l.c.’s activities in the United Kingdom will now be subject to regulation by the PRA and oversight by the PRA’s European Banks Team and by the FCA, from a conduct perspective.

Since 2019, BNF Bank has been actively operating in the United Kingdom through its established branch in London, and later operating under the Temporary Permission Regime implemented in the United Kingdom as from December 2020.

“The recent approval from the PRA and the FCA further reinforces the Bank’s commitment to operating in the United Kingdom in strict adherence to all regulatory standards,” said BNF Chief Commercial Officer George Debono.

“The Bank looks forward to continuing its operations with the highest level of compliance and professionalism along with providing our clients with the unique opportunity of assisting them with their UK banking requirements,” he added.

Chief Executive Officer David Power explained that the license is approved with immediate effect, as of the 14th December 2023, which means that the Bank is now able to re-open for business in London. “The United Kingdom is a key part of our Vision 26 Strategy, which was recently approved by the Board of Directors. Being the only local bank with this opportunity, will allow us to expand into the UK market and offer unique products and services not only to our Maltese customers, but also to acquire new customers to the bank who are based in the UK.” he concluded.