MDB Publishes Second Annual Report

The Malta Development Bank publishes its Second Annual Report

 
The Malta Development Bank (MDB) has just released its second Annual Report which was tabled in Parliament on 27 April 2020 in line with the requirements of Article 33 of the Malta Development Bank Act, 2017 (Cap 574). 
The Report reviews the Bank's forward-looking strategy and its activities during 2019. It also includes detailed financial statements for the period ending 31 December 2019.
In his opening statement, Prof Josef Bonnici, Chairman, notes that 2019 saw the introduction of MDB’s first financial products in the SME segment as well as the first financial instrument funded from EU Structural Funds promoting further education. Concurrently, the Bank continued to strengthen its organisational set-up and intensified the capacity building process to gear itself for a more fundamental role in Malta’s economy.

The Report states that in 2019 the MDB supported the SME sector by focusing on risk sharing instruments in the form of loan guarantee programmes which provide an MDB guarantee of 80% on each eligible loan to SMEs up to €750,000 for a term of up to 10 years. Through such instruments the MDB is enhancing considerably the access by SMEs to commercial bank financing, thereby encouraging banks to mobilise their liquidity more productively through the provision of SMEs financing. In 2019 the MDB launched two schemes of this form. The Family Business Transfer Facility was the first scheme launched on the basis of a Risk Sharing Agreement between the MDB and Bank of Valletta where the MDB created a guarantee fund of €4 million which will enable BOV to generate a loan portfolio of €10 million. This scheme is aimed to support the continuity and longer-term sustainability of such family businesses. 

The MDB Guarantee Facility for Loans to SMEs is the second type of scheme launched by the MDB during 2019. Through the 80% guarantee, the scheme facilitates lending for new investment by SMEs that are viable but unable to obtain the required amount of finance from a commercial bank due to factors such as lack of collateral or the risky nature of the business venture. Bank of Valletta was the first implementing partner of the MDB for this type of guarantee facility through the launch of SME Invest which is backed by an MDB guarantee fund of €10 million to enable BOV to generate a loan portfolio of €50 million for new investment. Discussions with another two commercial banks in connection with the launching of similar schemes had reached an advanced stage during the year reviewed. As at end-December 2019, total sanctioned loans to SMEs supported by the MDB amounted to €14.5 million spread across 33 beneficiaries and supporting nearly 600 jobs.

In accordance with its objective to support businesses at all stages of development the MDB also conducted extensive consultations with the local banks in connection with a Guaranteed Co-lending Facility for SMEs catering for loans exceeding €750,000 up to €3 million. The MDB allocated €50 million for co-financing under this new scheme that is planned to be launched during 2020.

In 2019, the MDB was entrusted by the Managing Authority for EU funds to develop a financial instrument to support further tertiary level education.  Following a competitive call for expression of interest from banks to implement the ‘Further Studies Made Affordable’ financial instrument, Bank of Valletta launched the BOV Studies Plus+ on 3 October 2019. It is the first example of a blended financial instrument combining grants to subsidise all interest payments of students during the study period up to 5 years and soft loans up to €100,000 for up to 15 years benefiting from an MDB guarantee of 80% on such study loans. By the end of the year this MDB guarantee scheme had supported 56 students with €2.7 million in soft loans.

During the year the MDB was also engaged in consultations with banks and other stakeholders regarding the financing of infrastructure projects through a range of diversified intermediation solutions such as syndicated facilities, longer term financing and low interest rates. The focus is on projects with a strong social dimension particularly in the affordable housing, educational fields as well as in energy efficiency and the green economy.

The Report dedicates a chapter reflecting its strong governance focus on Risk and Capital Management. The MDB manages risk through cooperation between the Supervisory Board, the Board of Directors and the three lines of defence and adopts an informed and proactive approach that is consistent with its underlying business activity. The MDB remains adequately capitalised to absorb any potential losses whilst fulfilling its public policy objectives as set by the Board of Directors.

The Annual Report is accompanied by the audited financial statements of the MDB for its second year of operations. During 2019, government affected an additional equity contribution, raising the MDB’s share capital to €40 million, strengthening its equity base and enabling further growth of the bank’s balance sheet.

The MDB’s Annual Report for 2019 is available here​.

 

Il- Bank Malti ta’ Żvilupp jippubblika it-tieni Rapport Annwali tiegħu

 Il-Bank Malti ta’ Żvilupp (MDB) ħareġ it-tieni​ Rapport Annwali tiegħu li ġie mressaq fil-Parlament fis-27 ta’ April 2019 b’konformità mal-Artiklu 33 ta’ l-Att tal-2017 dwar il-Bank Malti ta’ Żvilupp (Kap 574).
Ir-Rapport jagħti rendikont tal-istrateġija u l-attivitajiet tal-Bank matul is-sena 2019. Ir-Rapport jinkludi ukoll id-dikjarazzjonijiet finanzjarji għall-perjodu sa 31 ta’ Diċembru 2019.
Fl-istqarrija tiegħu, il-Professur Josef Bonnici, iċ-Ċermen tal-Bank, irrimarka li fl-2019 l-MDB introduċa l-ewwel prodotti finanzjarji tiegħu fis-settur tal-intrapriżi ta’ daqs żgħir u medju (SMEs) kif ukoll l-ewwel strument finanzjarju li jippromwovi l-edukazzjoni terzjarja iffinanzjat minn fondi strutturali ewropej. Matul is-sena il-Bank kompla jsaħħaħ l-istruttura organiżżativa tiegħu u intensifika il-proċess ta’ tisħieħ fil-kapaċitajiet tiegħu bi preparazzjoni għal-twettiq ta’ rwolijiet fundamentali fl-ekonomija Maltija. 

Fl-2019 l-MDB kien ta’ sostenn għas-settur tal-SMEs billi iffoka fuq programmi ta’ garanziji fuq self bankarju ta’ 80% fuq kull self lill-SMEs sa’ massimu ta’ €750,000 u b’terminu sa 10 snin. B’dawn l-istrumenti l-MDB itejjeb l-aċċess għall-finanzjament bankarju tal-SMEs u jinċentiva lil banek biex jimmobiliżżaw il-likwidita’ tagħhom b’mod aktar produttiv billi jselfu lil SMEs. L-2019 l-MDB nieda żewg skemi ta’ din it-tip. Il- Il-Facilita’ għal trasferiment ta’ negozji tal-familja kienet l-ewwel skema li ġiet varata permezz ta’ ‘risk sharing agreement’ bejn l-MDB u l-Bank of Valletta fejn l-MDB ħoloq fond ta’ 4 miljun ewro biex jiffaċilita’ portafoll ta’ self ta 10 miljun ewro mill-BOV. L-oġġettiv tal-iskema hu li tagħti sostenn, kontinwita’ u sostennibilta’ fit-tul lin-negozji tal-familja.

Il-Facilita ta’ Garanzija fuq self lill-SMEs hija it-tieni skema ta’ din l-għamla li ġiet varata mill-MDB matul l-2019. B’garanzija ta’ 80 fil-mija l-iskema tiffaċilita self għall-investiment ġdid minn SMEs vijabbli li pero’ isibu diffikulta’ biex jiksbu self bankarju minħabba fatturi bħal nuqqas ta’ assi x’jagħmlu tajjeb jew għaliex in-natura tal-attivita’ tan-negozju tkun xi ftit riskjuża. Il-BOV kien l-ewwel bank li implimenta din il-faċilita bit-tnehdija tal- SME Invest li tgawdi minn garanzija tal-MDB ta’ 10 miljun ewro li tiffaċilita’ self ta’ 50 miljun ewro għall-investiment ġdid. Matul is-sena avvanzaw sew in-negojati ma’ żewg banek oħra biex jimplimentaw skemi simili. Sal-aħħar tal-2019, it-total ta’self lill-SMEs iggarantit mill-MDB leħaq l-ammont ta’ 14.5 miljun ewro maqsum bejn 33 benefiċarju u sostna 600 post tax-xogħol.

Huwa l-oġġetiv tal-MDB li jkun ta’ sostenn għall-intrapriżi f’kull stadju tal-iżvilupp tagħhom u għalhekk il-Bank għamel konsultazzjonijiet mal-banek kummerċjali b’konnessjoni mal-Faċilita ta’ garanzija fuq ko-finanzjament għall-SMEs li tkopri self il-fuq minn 750 elf ewro sa 3 miljun ewro. L-MDB alloka 50 miljun ewro għall-kofinanzjament taħt din l-iskema li għandha tiġi varata matul l-2020.

Fl-2019 l-MDB ġie appuntat mill-Awtorita’ Kompetenti għall-Fondi mill-Unjoni Ewropea bħala l-entita’ responsabbli mill-implimentazzjoni ta’ strument finanzjarju li jippromwovi l-edukazzjoni terzjarja. Fit-3 t’Ottubru il-BOV vara il-BOV Studies Plus+ wara sejħa għall-espressjoni ta’ interess biex jiġi implimentat l-istrument ‘Further Studies Made Affordable’. Dan huwa l-ewwel eżempju ta’ strument finanzjarju li jikkombina għotjiet fil-forma ta’ sussidju fuq l-imgħax kollu tul il-perjodu ta’ studju sa’ massimu ta’ 5 snin u self f’kundizzjonijiet vantaġġjuzi sa’ massimu ta’ 100 elf ewro  b’terminu sa 15 il-sena li jgawdi minn garanzija ta’ 80% mill-MDB fuq kull self. Sal-ahhar tal-2019 din l-iskema ipprovdiet għajnuna lil 56 student b’self totali ta’ 2.7 miljun ewro.  

Matul is-sena l-MDB kien ukoll involut f’konsultazzjonijiet ma’ banek u entitajiet rigward finanzjament ta’ proġetti infrastrutturali fejn l-MDB joffri varjeta’ ta’ soluzzjonijiet finanzjarji bħal-self sindikat u fit-tul u b’rati tal-imgħax skontati. L-enfasi hija fuq proġetti b’dimensjoni soċjali bħall-akkomodazzjoni affordabbli, l-edukazzjoni u l-enerġija nadifa. 
Ir-Rapport jiddedika kapitolu b’riflesjoni fuq il governanza tal-Bank b’enfasi fuq l-immaniġġjar tar-riskju u l-kapital. L-MDB jimmaniġġja ir-riskju b’koperazzjoni bejn il-Bord ta’ Superviżjoni, il-Bord tad-Diretturi u it-tlett linji ta’ difiża interna tal-Bank. L-istrategija tal-Bank hi li jadotta metodu proattiv u konsistenti mal-attivitajiet tal-Bank. L-MDB huwa kapitalizzat b’mod adegwat biex jassorbi t-telf u biex fl-istess waqt iwettaq il-missjoni tiegħu skont id-direzzjoni tal-Bord tad-Diretturi. 

Ir-Rapport Annwali jinkludi  id-dikjarazzjonijiet finanzjarji tal-MDB għat-tieni sena tal-operat. Matul l-2019, il-Gvern kopla jsaħħaħ il-kapital tal-Bank għal 40 miljun ewro biex b’hekk jippermetti aktar tkabbir fl-operat tiegħu. 

Ir-Rapport Annwali tal-MDB għall-2019 huwa disponibbli hawn