Issue link: https://maltatoday.uberflip.com/i/294639
maltatoday, SUNDAY, 13 APRIL 2014 8 News Small businesses want lower interest rates on bank credit MATTHEW VELLA THE Chamber of Small Business (GRTU) has joined the chorus of business voices saying that Maltese SMEs must have easier access to banking credit. "We were very pleased to hear the undeniable confirmation from the governor of the Central Bank him- self who insisted that lending rates in Malta are the fourth highest in the euro area," the GRTU said. Maltese SMEs are facing lending rates that are far higher than those faced by their counterparts not just in Luxembourg, but also in dis- tressed countries Spain and Italy. Interest rates in Malta are higher than the euro area average. "When comparing this rate with the aver- age in countries that have been ex- periencing economic trouble, you can see that our banks are not fol- lowing the same route," CBM gov- ernor Josef Bonnici said. In 2009, the difference in the rates set by the European Central Bank and those offered by Maltese banks was 2.8%, and in 2013 this climbed to 4.8% while for countries like Luxembourg this difference has re- mained stable. GRTU president Paul Abela said that that both bank interest rates and bank charges remain excessive, especially on the smaller enterprises that have less negotiating muscle. "Banks are still increasing their charges with a relatively recent de- velopment as an example by HSBC where it had introduced charges on internet banking to the private sector. The bank had saved money when it closed some branches and pushed businesses to go online to affect their banking needs," Abela said. Abela said that bank charges in Malta are higher than in many other places, when the changeover to internet banking should have meant lower charges. "In Luxem- bourg banks reduced costs of in- ternet banking to encourage people to switch over to internet bank- ing. Not in Malta. In Malta banks charge you even to transfer your money between your own accounts because more than one bank is in- volved," Abela said. Malta's two major banks, and a third core domestic bank – Banif Bank – have denied suggestions by European Commission experts who have examined the island's banking sector, that high interest rates are the result of some form of collusion or anti-competitive tactics by the banks. The European Commission's IDR (in-depth report) has not ruled out possible collusive behaviour among banks, after four of the five core domestic banks, identified by the Central Bank of Malta, appeared to have similar interest margins on loans. The IDR found that the interest margin – the difference between interest rates on deposit accounts and loans – was so similar between banks, that it was possible that the limited competition had allowed interest rates on loans to converge between different banks… even if the profits that Maltese banks are making would allow them to start bringing interest rates down, in line with other EU banks. Labour MP Silvio Schembri has also led talks as chairman of the parliamentary economic and finan- cial services committee, on bring- ing banks to lower interest rates on lending to SMEs. The EC report confirms claims that the interest rates charged on corporate loans appear relatively high, while retail banking fees in the two dominant banks – BOV and HSBC – appear higher than in the rest of the sector. "A closer look at the drivers of the high in- termediation margin and fee and commission income could, thus, be warranted." 'Banks are still increasing charges: HSBC introduced charges on internet banking despite pushing businesses to go online Paul Abela, GRTU Water Services using 33% less energy for reverse osmosis Council for the south no longer under Brincat's remit JAMES DEBONO THE Water Services Corporation has reduced its consumption of en- ergy for the running of its reverse osmosis (RO) desalination plants by 33% in the last ten years. In 2004, the island's electricity consumption from using RO-based desalination was 101,126MWh, making up 4.8% of total electricity consumption for the island. In 2013 this decreased to 78,871 MWh, or 3.7% of Malta's total elec- tricity supply. The positive results were pub- lished in WaterWorld, a leading online news and technology source serving engineers and consultants in the water industry. In terms of the amount of energy used to produce one cubic metre of water, in 2004 this was 5.7 kWh and in 2013 this had dropped to 4.6 kWh. "These are indeed positive results for the Corporation and we want to build on these fantastic figures," WSC chairperson William Wait told MaltaToday. "The decrease in energy for the RO plants is mainly attributed to the decrease in water production, in view of the leakage problems, and the installation of more en- ergy efficient equipment within the plants themselves." Consolidating these figures is a main priority for Wait, who de- scribed the WSC's leakage reduc- tion as "world class". Engineering innovations are also central to the future of the WSC. Late in 2013, this was formally rec- ognised when the Water Services Corporation gained the top award in the 2013 Malta Engineering Ex- cellence Awards, organised by the Malta Chamber of Engineers. "We are an open-minded organisation, ready to learn from best practices in other countries and from local expertise." JAMES DEBONO THE Consultative Council for the South chaired by Labour MP Silvio Parnis has been transferred from under the tutelage of environment minister Leo Brincat to Helena Dalli's ministry for civil liberties and social dialogue. While the Office of the Prime Minister made all appointments to the committee, Brincat had appointed a board sec- retary and an observer from his secretariat to ensure strict adher- ence from the council to its terms of refer- ence. When contacted, Brincat con- firmed that the committee no long- er forms part of his ministry, say- ing that although his ministry was meant to have a coordinating role, the OPM appointed board mem- bers and set terms of reference from early on. The members of the committee are Angela Abela, Kenneth Abela, Jason Bonnici, Lino Bugeja, Graziella Cavlan, Sandro Chetcuti, Peter Cordina and Josie Muscat. The Opposition nominated Charlot Cassar as its repre- sentative while Nora Ma- celli represents the Catholic archdiocese of Malta. The consultative coun- cil's role was to analyse the southern region's problems and propose suggestions to tackle them. Its mission is broadly to work for the "south's general improvement in the framework of sustainable d e v e l o p m e n t leading to better quality of liv- ing". The council can also suggest plans of action and schemes to be considered by the government. William Wait: in 2004, the WSC consumed over 101,000MWh to desalinate sea water; today this has fallen to 78,800MWh, or 4.6 kilowatts per hour to produce one cubic metre of water. Leo Brincat