Issue link: https://maltatoday.uberflip.com/i/1172208
4 maltatoday | SUNDAY • 29 SEPTEMBER 2019 CONTINUED FROM PAGE 1 A source at the bank said Hunkin's appointment comes in the wake of pressures from the European Central Bank to have BOV select a boss un- related to fund management business, and who fits the bank's conservative risk ap- petite. Bank of Valletta, one of Mal- ta's core domestic banks and a major lender for home-own- ers, was hit by a series of nega- tive news in the last years. With its credit rating down- grade by S&P stepped down to BBB-, the bank last Febru- ary was forced to suspend all its operations after hackers broke into its IT system and moved €13 million into for- eign accounts. In 2019, BOV put aside €75 million to cater for ongo- ing litigation which cut the group's profits and left share- holders without a cash divi- dend for 2018. The litigation provision an- nounced last year came after an Italian court issued a freez- ing order on €363 million worth of assets over the Dei- ulemar case, a bankrupt ship- ping company whose bond- holders insist their savings were held in a trust at BOV by the company owners. The bank is also fending off another headache from the Swedish pensions regulator, which is holding the bank re- sponsible for losses incurred by Swedish savers who invest- ed their cash with a Malta-run pension, Falcon Funds, whose custodian was Bank of Val- letta. Malta's financial services industry now has to reckon with a momentous decision by Bank of Valletta to stop its custodian services for Malta- based funds, which hold noth- ing less than four billion in assets. The bank sent out its pre- notification letters to finan- cial services companies which run so-called UCITS funds back in July, announcing that eventually it will be terminat- ing its custodian services. As a custodian, BOV of- fered a very specialised ser- vice – mandated by EU rules – which ensures that funds which invest customers' sav- ings in bonds or blue-chip stocks, are liquid enough to ensure the redemption of their investments. This crucial surveillance role also ensures that investment and pensions funds are re- specting their own rules when investing their clients' cash in liquid investments. BOV assumed its role as Malta's first port of call for custodian services when Deutsche Bank closed down its services on the island, with most of its custodian business migrating to BOV. UCITs funds with dollar in- vestments are especially con- cerned, due to Malta's own problems, with a shrinking network of US correspondent banks. Bank of Valletta had already announced last year that it was reconsidering its risk ap- petite by taking all steps to close its trust business, and undertake a strategic review of the custody business and evaluate its client base. "The bank will be undergoing a de-risking exercise by cutting down on non-core business that delivers very little profit for the risk involved," BOV chairman Deo Scerri has said. Recent misadventures with its own La Valette funds, which led to a multi-million payout ordered by the finan- cial services regulator and the financial services arbiter, has also forced BOV to take a closer look towards its own internal controls. "The bank has to hive off people who don't perform… they're given great packages to the detriment of long- serving colleagues, and de- spite not performing, are not fired. This bad vibe is killing the bank slowly," one banking veteran who spoke to Malta- Today on condition of ano- nymity said. The bank employs around 2,000 employees. mvella@mediatoday.com.mt NEWS English boss for Bank of Valletta IN Rick Hunkin PHILIPPINES immigration officers barred seven "Filipi- no tourists" from boarding an aircraft at the Ninoy Aquino International Airport, after they were found to be undoc- umented overseas Filipino workers. The seven passengers were not allowed to leave after admitting under questioning that they were not tourists but going abroad to work. They were barred from leaving after immigration of- ficers noticed that the victims were travelling with a woman who is in the immigration bu- reau's alert list of suspected human traffickers, who fa- cilitate the deployment of un- documented workers abroad. They also presented ques- tionable documents regard- ing the purpose of their trav- el. They initially claimed they were attending a symposium but later admitted during the interview that they were hired to work as maids in Malta. The seven gave P500,000 (€8,700) to their handler in return for processing their travel documents and visas. All seven passengers were turned over to the NAIA Task Force Against Traffick- ing in Persons for further in- vestigation. Filipino maids bound for Malta were being trafficked OUT Mario Mallia