Adrian Said - Malta Institute of Management

P
Empower Measure Create Simplify >>
Cross Border Strategies for Financial
Services: an analysis of Malta’s
Comparative & Competitive advantages
>>
Adrian Said

Performance to date
Malta’s financial services industry is a growing industry and increasingly
becoming important to Malta’s future growth
Gross Value Added in Financial Intermediation sector increased to 7.5%
in 2010 from 5.5% registered in 2009
Total number of full time gainfully occupied in direct financial
intermediation services amounted to 6,300 in 2010 (4% of gainfully
occupied)
Gross Value Added per employee in Financial Intermediation registered
in 2010 was circa €62,000 per capita
Malta’s competitiveness in the financial services sector ranked highly by
the World Economic Forum’s Global Competitiveness index at 15 th out
of 142 countries for its financial market development
Growth is robust and is underlined by strong level of competitiveness
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Performance to date
International Operators –
Success stories
Banking & Financial
Institutions
•GarantiBank
•HSBC Bank (Malta) plc
•Fortis Bank
•FEXCO
•BAWAG Malta Bank Ltd
•CommBank Europe Ltd
•Mediterranean Bank
•Fimbank
•Sparkasse Bank
•Bank of Valletta plc
•Banif Bank
Funds
•Barclays
•Insight Investment
•Lloyds TSB
•Tell Investments
•FMG
•Altma Funds
•NBCG
•Liongate
•Clive Capital
Hi-Tech Hi Tech Manufacturing
•Lufthansa Technik
•ST Microelectronics
•Trellerborg Sealing Solutions
•Methode Electronics Malta
•Carlo Gavazzi
•Actavis Group
•Cardinal Health
Captive Insurance
•Marsh
•Aon Insurance
•JLT
•International Insurance
Management Services
•Bavaria Reinsurance
Malta (BMW)
ICT
•Crimsonwing
•RS2 Software
•Dedicated Micros
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How does Malta compare to other jurisdictions?
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Performance to date
FTSE 100 companies hold 8,492 subsidiary companies outside the UK
(Action Aid 2011)
Malta: 32 companies (.37%)
Cyprus: 57 companies (.67%)
Switzerland: 234 companies (2.7%)
Luxembourg: 336 companies (3.9%)
Ireland: 771 companies (9%)
FTSE 100 -
Companies
Registered in
Malta
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Malta’s Competitive Positioning
Raising productivity— meaning making better use of available factors and
resources— is the driving force behind the rates of return on investment
which, in turn, determine the aggregate growth rates of an economy
Thus a more competitive economy will be one which will likely grow faster in a
medium to long-term perspective
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Malta’s Competitive Positioning
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Malta’s Competitive Positioning
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Malta vs. Luxembourg
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Malta vs. Luxembourg
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Malta vs. Cyprus
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Malta vs. Cyprus
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Malta vs. Ireland
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Malta vs. Ireland
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Other indicators
GFCI 9
A survey of 75 financial centres from 1,970 financial
services professionals
The depth within a financial centre of the
following industry sector: asset management,
investment banking, insurance, professional
services and wealth management.
Extent to which a centre is well known around the
worked hand how much non –resident
professionals believe it is connected to other
financial centres
Diversity – breath of industry sectors that flourish in a
financial centre, The ‘richness’ of the business
environment to be measurable in similar way to that of
the natural environment.
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High/Low
Connectivity/exte
nt to which a
centre is well
known around
the World and the
extent
professionals
believe it is
connected to
other financial
centres
Low/High
Low
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Challenges/Opportunities
Current economic climate could restrain growth internationally
New Forces and increased international competition are driving the
development of established and emerging financial centres
The reputation of jurisdictions has assumed an increased prominence in
the firms’ investment decisions and the competitiveness of financial
centres
WEF analysis clearly indicates that Malta’s as a jurisdiction could prove
competitive vis-à-vis other European countries including Ireland
Need to focus on securing competitiveness on the basis of a high
quality offering in relation to price.
Scope to develop stronger awareness of Malta as a jurisdiction
The challenge is to further develop a financial services industry
underpinned by world-class infrastructure and universally recognised on
the global stage
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Key Recommendations
Control of Quality & Business Costs
General feedback points at a decline in overall quality of
professional service delivery in Luxembourg coupled with escalating
costs
Ireland focused on growing services and benefiting from improved
cost competitiveness as a result of domestic economic
developments
Enhanced need for Malta to be innovative in its value proposition
(legislation) and in particular to ensure sufficient qualified human
resources so as maintain cost competitiveness
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Key Recommendations
Brand development and marketing
Finance Malta and the private sector have made significant
investment in the promotion and development of Malta’s image as a
reliable and effective jurisdiction.
However, cooperation and coordination between all stakeholders is
essential to promote a consistent and positive image of Malta
The Ministry of Foreign Affairs could play stronger role in the
disseminating of information through Malta’s embassy network, and
other stakeholders to ensure that information is provided in a timely
manner.
Scope for increased marketing budget and synergies between all
stakeholders including a holistic drive for the development of the
brand. Scope to appoint an international brand ambassador for the
industry
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Key Recommendations
The setting up of the Malta international Training Centre
(MITC) provides for improved quality of trained personnel in
the sector
More emphasis needs to be placed on further developing a
national curriculum that is in tune with the requirements of
this industry and in particular in the improvement in the
overall standard of the English language + other languages,
strong emphasis on numeracy and sound knowledge of
finance/economics at early stages
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Other Recommendations according to
product offer
Insurance: Under the Solvency II Directive there is a clear advantage for
European re/insurance operations to centralise their organisational structure
in a single head office located within the EU. This involves replacing a multisubsidiary
structure in a single head office with branches into Europe/Third
countries to optimise capital and generate other wise, a cost and admin
efficiencies
Funds: Introduction of the EU Alternative Investment Funds (AIFs) and
UCITS IV Directive present opportunities and threats.
A structured and focused promotional profiling campaign focused on the source
of business activity to attract funds to be domiciled and administered in Malta.
Attracting internationally distributed funds requires effective engagement with
other jurisdictions, through MOUs, a broad Tax Treaty Network and other
regulatory communications. There is also scope to widen the industry footprint by
targeting, technology firms and management companies
Focus on attracting asset managers from Asia and the Middle East who are
looking to establish a European footprint
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Other Recommendations according to
product offer
Aircraft leasing: Together with aircraft registration, Malta
could focus on developing Malta into a centre for aircraft
leasing by offering activities performed across a broad
spectrum and including sales, remarking and lease
placement, financing operations, acquisition and
management transaction negotiation, execution and del
structuring and technical services.
Middle East : Transform Malta into a credible business
partner for investors from the MENA in relation to services
that include fund administration, distribution of UCITS
funds, aircraft leasing and location of family offices
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EMCS Ltd.
Tel: +356 21 341848/9
Web: www.emcs.com.mt
e-mail: adrian.said@emcs.com.mt
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