The Malta Independent 21 May 2019, Tuesday

The price of vigilance

Thursday, 21 February 2019, 10:36 Last update: about 4 months ago

In just a few days, we have had some serious intimations of mortality in what we thought were the safest and most solid of our institutions - the banks.

After all, the banks in Malta, both the domestic ones, and the ones who though located in Malta cater mostly for international business, had come through the 2008 crisis with flying colours.

But then, a week yesterday, (just as we were closing the paper) disaster struck. One of the Bank of Valletta systems fell victim to a hacking attempt. The hackers falsified various transactions which transferred a total of €13 million to four different countries.


The bank at that point in time had no alternative but to shut down all its systems and operations.

This was a day and a night of high drama as people and companies contemplated having to do without the bank for an unspecified time. Fortunately, after a whole night of testing the bank's IT systems, and declared safe. The bank's branches reopened, the ATMs came alive and business resumed. It so happened that that day, Thursday, was St Valentine's and people's worst fears proved unfounded.

(There is an ongoing investigation to try and see where the €13 million went and to try and recover them.)

For the bank, the biggest one on the island, this latest misadventure came after a whole series of others - from the misadventure in Italy which left the bank having to forego paying out dividends this year, to allegations which go back years and years to the birth of the bank, etc.

Then on Tuesday, as we also report in this issue, HSBC announced a 23% decrease in reported profit before tax compared to last year, and a 34% decrease in adjusted profit before tax.

The bank provided its rationale to explain these figures - in 2018 the bank completed its risk management action and reduced its Non-Performing Loans and consequently its balance book now is slimmer but safer.

The two situations are not comparable nor are we trying to compare them. But coinciding as they did on practically the same days, they make us reflect that our banks, so apparently solid, have feet of clay and thus must be protected and enhanced if we are not to follow other countries with problems in our banks.

We as a country must ensure the banks remain safe and solid, without putting them under pressure to be more lenient in their treatment of clients. Let the banks do their business as they have always done without any interference or pressure.

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