The MBA has been meeting regularly and keeping in constant touch with the Maltese authorities to provide its support in connection with the developing COVID-19 situation. These included Economy Minister Hon Silvio Schembri, Finance Minister Hon. Prof Edward Scicluna, Parliamentary Secretary Hon. Clayton Bartolo as well as the leadership of the Central Bank of Malta, the Malta Financial Services Authority, the Financial Intelligence Analysis Unit and the Malta Development Bank, amongst others.
The meetings, which were attended by the CEOs and senior executives of the core domestic banks, discussed both operational arrangements for the provision of essential banking services as well as support for the local economy in these challenging times. The banks expressed their unwavering commitment of assistance across all segments of Maltese society, from those sectors and industries directly impacted by the pandemic to families and personal borrowers on salaried income. Separately the banks have been communicating their own schemes, engaging with and reaching out to their customers in the process. Discussions are also at an advanced stage with the Malta Development Bank with regard to the guarantee schemes announced by Government as part of its economic relief measures.
In these exceptional and rapidly evolving circumstances, the MBA notes with great concern the calls being made for a windfall tax to be levied on the profits of banks. This would be not only a short-sighted idea but one with potentially devastating repercussions on the economy and the country’s financial stability.
First, the myth that banks make excessive profits must be addressed once and for all. Banks are amongst the most stringently, multi-regulated and supervised entities at a local, European and international level. Their very existence and continuity to operate depends on their ability to make and retain certain levels of profits. They are evaluated on the profitability of their business model, their level of capital adequacy and the observance of minimum ratios, amongst various other things. Bank profits and their financial strength are what enables them to keep lending and supporting economic activity.
Secondly, it bears reminding that on their profits the banks have paid hundreds of millions of euros in direct taxes not to mention many tens of millions more in indirect taxes. Thousands of investors also benefit from those profits through the dividends they receive. And as employers and providers for the livelihood of thousands of bank employees and their families, the banks’ contribution to the country’s social and welfare system is significant.
Thirdly, the MBA and its member banks are of one mind with Government and the authorities in helping the country navigate through these challenging times by continuing to provide their essential services, and supporting the well-being of the nation, its people and industries. This means providing the necessary lifelines, reliefs and support to their customers in this time of need despite knowing that the banks will also carry their share of the burden for this.
It should be by now a foregone conclusion that 2020 is going to be one of the most challenging years in memory for bank profitability. Talk of imposing special or windfall taxes on the banks as some kind of consequence for their strong past performance would be a dangerous step at a time when the banking system needs all the stability it can have.
L-MBA iltaqgħet regolarment u qed iżżomm kuntatt kontinwu mal-awtoritajiet Maltin biex tagħti l-appoġġ tagħha b’rabta mas-sitwazzjoni li qed tiżviluppa fir-rigward tal-COVID-19. Dawn kienu jinkludu laqgħat mal-Ministru tal-Ekonomija l-Onor Silvio Schembri, il-Ministru tal-Finanzi l-Onor. Prof Edward Scicluna, is-Segretarju Parlamentari l-Onor. Clayton Bartolo, kif ukoll it-tmexxija tal-Bank Ċentrali ta’ Malta, l-Awtorità ta’ Malta għas-Servizzi Finanzjarji (MFSA), il-Financial Intelligence Analysis Unit (FIAU) u l-Malta Development Bank, fost oħrajn.
Il-laqgħat, li għalihom attendew is-CEOs u eżekuttivi tal-banek domestiċi ewlenin, iddiskutew kemm l-operat għas-servizzi essenzjali tal-banek kif ukoll l-appoġġ li għanda tinghata l-ekonomija lokali f’dawn iż-żminijiet ta’ sfida. Il-banek esprimew l-impenn bla waqfien tagħhom sabiex jgħinu is-setturi kollha tas-soċjetà Maltija, minn dawk l-oqsma u l-industriji milquta direttament mill-pandemija, għall-familji u dawk bi dħul bis-salarju li jissellfu fuq bażi personali u għal djarhom. B’mod separat il-banek qed jikkomunikaw l-iskemi tagħhom u infurmaw il-klijenti tagħhom f’dan ir-rigward. Diskussjonijiet jinsabu wkoll fi stadju avvanzat mal-Malta Development Bank fir-rigward tal-iskemi ta’ garanzija mħabbra dan l-aħħar mill-Gvern bħala parti mill-miżuri biex jgħinu l-ekonomija.
F’dawn iċ-ċirkostanzi eċċezzjonali u li qed jevolvu il-ħin kollu, l-MBA tinnota bi tħassib kbir is-sejħiet li qed isiru biex tiġi imposta windfall tax fuq il-profitti tal-banek. Din tkun mhux biss ideja short sighted, iżda waħda b’riperkussjonijiet potenzjalment devastanti fuq l-ekonomija u l-istabbiltà finanzjarja tal-pajjiż.
L-ewwelnett, l-ideja li l-banek jagħmlu profitti eċċessivi hija ħrafa li għandha tiġi indirizzata darba għal dejjem. Il-banek huma fost l-entitajiet li għandhom regolamentazzjoni qawwija, b’supervizjoni fil-livelli lokali, Ewropew u internazzjonali. L-eżistenza stess tal-banek u kemm jistgħu ikomplu joperaw tiddependi fuq kemm huma kapaċi jiġġeneraw u jżommu ċerti livelli ta’ profitti. Il-banek jiġu evalwati fuq il-profittabilità tan-negozju tagħhom, il-livelli tal-kapital li jżommu u l-osservanza ta’ ratios regolatorji, fost affarijiet oħra. Il-profitti u s-saħħa finanzjarja tal-banek huma dawk il-fatturi li jippermettulhom ikomplu fin-negozju, isellfu u b’hekk idawwru r-rota tal-ekonomija tal-pajjiż.
It-tieni, importanti li wieħed ifakkar li fuq il-profitti tagħhom il-banek ħallsu mijiet ta’ miljuni ta’ ewro f’taxxi diretti, biex ma nsemmux ħafna għexieren ta’ miljuni oħra f’taxxi indiretti. Eluf ta’ investituri jibbenefikaw ukoll minn dawk il-profitti permezz tad-dividends li jirċievu. Il-banek iħaddmu u jipprovdu l-għajxien għal eluf ta’ impjegati u l-familji tagħhom u jagħtu kontribut mill-aktar qawwi lis-sistema soċjali u l-benesseri tal-pajjiż.
It-tielet nett, l-MBA u l-banek membri tagħha huma tal-istess fehma bħal’-Gvern u l-awtoritajiet jiġifieri li rwol essenzjali tagħhom hu li jgħinu lill-pajjiż jgħaddi minn dawn iż-żminijiet ta’ sfida kbira billi jkomplu jipprovdu s-servizzi essenzjali tagħhom, u jappoġġjaw il-benesseri tan-nazzjon, in-nies u l-industriji. Dan ifisser li jiġu pprovduti l-lifelines neċessarji, is-solliev u s-sapport lill-klijenti tagħhom f’dan iż-żmien ta’ bżonn minkejja li jafu li l-banek se jġorru wkoll is-sehem tagħhom għal dan il-piż.
Għandu jkun ovvju għal kullħadd li l-2020 se tkun waħda mill-aktar snin ibsin fil-memorja għall-profittabilità tal-banek. Li wieħed jitkellem dwar taxxi speċjali jew windfall tax fuq il-banek bħallikieku xi imposta talli għamlu l-profitti fil-passat ikun pass perikoluż fi żmien meta s-sistema bankarja teħtieġ l-aktar stabbiltà li jista ‘jkollha.
