The original call was for a s120 million facility, but it was oversubscribed and attracted commitments in excess of s200 million.
Addressing guests during the signing, BOV chairman Joseph FX Zahra stated that he was pleased to note that BOV had just signed the largest syndicated loan ever raised by the bank.
The loan will be used primarily for refinancing and general corporate requirements of the bank. It comprises two equal tranches, one maturing after three years and another maturing after five years, he explained.
The chairman said the ongoing restructuring process of the bank’s operations will enable it to meet the single market challenges. “The past five years have seen the bank re-engineer its operations to become more customer centred, creative and innovative, while becoming more cost efficient.”
Mr Zahra then referred to initiatives taken during the past financial year, namely, the continued investment in the bank’s IT systems and internet based solutions, the consolidation of the bank’s Euro Mediterranean Strategy, the strengthening of credit management systems, and enhancements to the group’s organisation that promote quick and efficient decision-taking processes.
The signing was followed by a commemorative luncheon that was addressed among others by parliamentary secretary within the Finance Ministry Tonio Fenech.
Mr Fenech praised the bank’s achievements, saying that the loan reflects BOV’s good standing in the international financial community. The bank has a consistent track record of success as a financial service provider in Malta and a niche player in the Euro-Mediterranean region.
The financial services sector contributes an average of 10 per cent to Malta’s gross domestic product and employs over 5,000 people.
Mr Fenech praised the bank’s ongoing investment in its new premises in Santa Venera and additional IT systems, as well as its continual investment in human resources that will ensure further success to the company, not only within the local economy but also in the more global perspective.
Mr Fenech said BOV has also been an active participant in the international syndicated loan market, adding that its track record in this field has contributed significantly to broadening and diversifying the bank’s funding sources, enabling it to look more actively at ways of interfacing Malta’s financial market with the global market.
In particular, such syndicated loans provide a stronger basis for local banks to extend credit in foreign currency, thereby putting them in a better position to cater more adequately to the clients’ borrowing requirements in foreign currency, he said.
Commenting on Malta’s recent European Union accession, Mr Fenech said membership has undoubtedly enhanced the country’s profile in foreign financial markets and has brought about tangible opportunities for our economy.
In this connection, he mentioned what he called the unlimited access to the EU’s internal market of over 500 million people.
EU membership had reduced technical barriers such as rules of origin affecting one’s operations.
Mr Fenech stressed that Malta should establish niche market opportunities within the single market to develop its financial services, as is the case of Luxembourg and Dublin.
He encouraged further dialogue between the industry and the Malta Financial Service Authority as well as increased liaison between Maltese financial services sector operators and their EU counterparts.
This synergy will meet the Lisbon Council objectives to become the most competitive and dynamic knowledge-based economy in the world, capable of sustainable economic growth with more and better jobs and greater social cohesion by 2010 a reality.