MFSA 2018 Annual Report and Financial Statements

This Report gives an overview of the work carried out by the MFSA and provides details regarding the industry’s growth throughout the year 2018. The financial services sector has seen a successful growth rate of 9.5% over the previous year, despite facing a highly competitive environment in the industry. A total of 144 entities have been registered with the MFSA, which raises the number of licensed entities with the MFSA to over 2,300. 

The financial sector now contributes 11.6% of the Maltese economy, making it the highest contributor to the economy. 1,000 new jobs were generated by the industry by the end of 2018, thus the sector now employs more than 12,000 persons, and the sector consists of 5.3% of local employment.

Key elements of the MFSA’s activity:

  • Major reconstruction exercises to strengthen the Authority’s organisational capability;
  • The establishment of the VFA Act, putting Malta at the forefront of the distributed ledger and virtual assets community;
  • Regulatory action against Pilatus Bank and Satabank plc for prudential and AML/CFT breaches;
  • Collaborated with IMF and FSAP to improve the banking system’s resilience;
  • Signed an MoU with the FIAU to enhance intensity of AML/CFT inspections;
  • Published over 600 regulatory notifications aimed at enhancing regulatory enforcement for entities and safeguarding consumers of the industry;
  • Issued consultation documents on various topics;
  • Gained first-hand experience in retail customer experience through the mystery shopping exercise;
  • Delivered over 11,000 hours of training to the MFSA employees;
  • Registry of Companies was changed into the Malta Business Registry as its own separate entity, independent from the MFSA;

The aim behind the supervisory activity of the MFSA was to achieve improved statutory objectives while safeguarding Malta’s reputation as the jurisdiction of choice for financial services. The MFSA’s supervisory activity throughout the year 2018 was mainly focused on the following specific areas:

  • Reconstruction and reform exercise in organisational structure;
  • Combating money laundering and terrorist financing;
  • Supporting technological innovation;
  • Repositioning MFSA as leading employer.

2018 Growth in Statistics:

  • Deposits within domestic banks: 6.1%
  • Account deposits: 70.3%
  • Core amount of bank loans: 6.3%
  • Non-core amount of bank loans: 18%
  • Securities and investment services sector: 8.3% (amounting to €11.7 billion in 2018)
  • Corporate bonds trading: 22.5% from 2017 (reached €93.7 million)
  • Net value of funds domiciled in Malta: 8% from 2017 (up to €11.7 billion)
  • Locally managed assets of non-Malta domiciled funds: 9.1% (up to €24 billion)
  • Retirement pension schemes: 11.5% (up to €5.35 billion in assets)
  • 63 breach cases investigated
  • 7 public warnings issued
  • Training hours to MFSA employees: Increased by 19%
  • 15 consultation documents and 7 feedback statements
  • 600 notifications published
  • 26 adverts corrected, these being:
    • 9 investment firms
    • 5 insurance intermediaries
    • 12 credit and financial institutions.
Naomi Hammett

Naomi Hammett

Naomi is a Legal Advisor at Blockchain Advisory. She has a great experience working with the Financial Authority with the Banking Unit, mainly drafting and implementing EU directives into Maltese law. Naomi is working towards specializing in financial services and corporate law.