Against an uncertain global backdrop due to the Middle East conflict, the Maltese economy is expected to present some degree of resilience to these effects in 2026, though a marginal delayed impact on GDP and prices is envisaged to materialise in 2027.

Growth over the projection horizon is expected to be led by private consumption, which is projected to continue to grow at a brisk pace, in part supported by recent changes to income tax bands.

Employment growth is expected to moderate gradually to 2.3% by 2028. The unemployment rate is forecast to edge down to 2.9% over the projection horizon.

Wage growth is set to remain strong, driven by labour market tightness, but is set to ease to 3.9% in 2028 from 4.2% last year.

HICP inflation is projected to be impacted by the war in the Middle East, primarily through the channel of higher imported inflation, particularly in goods and food components as continued fiscal support mitigates the propagation of the energy shock on domestic energy prices. Overall HICP inflation is thus projected to increase to 2.5% in 2026 and is set to remain at that level in 2027. It is then expected to ease to 2.2% in 2028, driven primarily by lower services and NEIG inflation. Compared to the Bank’s previous forecast publication, overall HICP inflation has been revised up by 0.2 percentage points in 2026 and 2028 and by 0.4 percentage points in 2027.

The general government deficit-to-GDP ratio is projected to continue to decline over the forecast horizon, albeit in a more gradual manner. It is set to narrow to 1.9% in 2026, 1.7% in 2027 and to 1.6% by 2028. The general government debt-to-GDP ratio is expected to decline further from 46.4% in 2025 to 46.0% in 2026 and subsequently to 44.1% by 2028. 

Risks to growth are tilted to the downside. These risks largely emanate from the uncertainty surrounding the duration and intensity of the conflict in the Middle East which may lead to a weaker external environment and hence a more subdued trajectory in foreign demand. Disruptions to transport through the Strait of Hormuz have also raised concerns on fuel shortages in trading partner countries which may negatively impact tourism, aviation and the shipping industry. However, this downside risk to tourism could be mitigated potentially by the redirection of tourists towards safer destinations like central and western Mediterranean.

Risks to inflation are tilted to the upside over the projection horizon. Upside risks to inflation primarily reflect stronger disruptions to energy markets than assumed in the technical assumptions. Although the direct impact on domestic energy prices continues to be mitigated by the Government’s commitment to its fixed energy price policy, higher than envisaged global energy prices could generate stronger imported inflation, with potential further amplification via indirect effects on wages and profit margins. Inflation could also be higher than expected if supply disruptions were to spread to non-energy markets, although alternative supplies from other regions could mitigate this effect.

On the fiscal side, risks are assessed to be tilted to the downside (deficit-increasing). These predominantly stem from the possibility of slippages in current expenditure, notably higher-than-expected spending on energy support measures should commodity prices exceed assumptions. These risks are partly mitigated by the likelihood of higher-than-forecast increases in tax revenue, brought about by additional improvements in tax administration.

The post Central Bank forecasts growth to remain resilient despite global uncertainty first appeared on The Malta Business Weekly.

The Malta Financial Services Authority (MFSA) has published findings from its 2025 Outcomes-Based Supervision review of marketing communications in the insurance and investment sectors. The review identified shortcomings in governance, disclosures, monitoring and record-keeping, while also highlighting examples of good market practice.

The review formed part of the MFSA’s wider Compliance Outcomes-Based Supervision framework, which focuses on achieving measurable supervisory outcomes that support consumer protection, market integrity and financial stability.

Marketing communications identified as a supervisory priority

Marketing communications were identified as a key supervisory priority for 2025, reflecting the important role that advertisements and promotional materials play in influencing consumer and investor decisions.

The review assessed whether marketing communications issued by regulated entities are fair, clear and not misleading, and whether consumers are provided with the information necessary to make informed decisions.

Key areas for improvement

The exercise identified several areas where firms are expected to strengthen their frameworks and controls.

Among the key findings were shortcomings in the documentation of marketing policies and procedures, weaknesses in post-publication monitoring processes, deficiencies in record-keeping practices, and instances where disclosures relating to risks, regulatory status and external website links were not sufficiently prominent or comprehensive.

The review also highlighted the importance of ensuring that marketing communications remain accurate, up to date and appropriately targeted to their intended audience.

Examples of good market practice

Alongside the areas requiring improvement, the authority identified examples of good market practice across the sectors reviewed.

These included regular reviews of marketing policies, structured compliance monitoring programmes, standardised disclosure templates, marketing compliance checklists and enhanced oversight controls designed to support fair and transparent communications.

Supporting consumer protection and market integrity

Christopher P. Buttigieg, chief officer Supervision at the MFSA, said: “Consumers and investors should be able to rely on marketing communications that are fair, clear and not misleading. Through our Outcomes-Based Supervision framework, we continue to engage with industry to strengthen standards, promote transparency and support informed decision-making across Malta’s financial services sector.”

The Dear CEO Letters set out the authority’s expectations and provide guidance to licensed entities on addressing identified shortcomings and enhancing compliance with applicable regulatory requirements.

The MFSA said it will continue engaging with firms as part of its three-year supervisory cycle and will assess the extent to which the expected compliance outcomes have been achieved.

The post MFSA highlights marketing compliance findings from 2025 Outcomes-Based Supervision review first appeared on The Malta Business Weekly.

The Malta Financial Services Authority (MFSA) has published findings from its 2025 Outcomes-Based Supervision review of marketing communications in the insurance and investment sectors. The review identified shortcomings in governance, disclosures, monitoring and record-keeping, while also highlighting examples of good market practice.

The review formed part of the MFSA’s wider Compliance Outcomes-Based Supervision framework, which focuses on achieving measurable supervisory outcomes that support consumer protection, market integrity and financial stability.

Marketing communications identified as a supervisory priority

Marketing communications were identified as a key supervisory priority for 2025, reflecting the important role that advertisements and promotional materials play in influencing consumer and investor decisions.

The review assessed whether marketing communications issued by regulated entities are fair, clear and not misleading, and whether consumers are provided with the information necessary to make informed decisions.

Key areas for improvement

The exercise identified several areas where firms are expected to strengthen their frameworks and controls.

Among the key findings were shortcomings in the documentation of marketing policies and procedures, weaknesses in post-publication monitoring processes, deficiencies in record-keeping practices, and instances where disclosures relating to risks, regulatory status and external website links were not sufficiently prominent or comprehensive.

The review also highlighted the importance of ensuring that marketing communications remain accurate, up to date and appropriately targeted to their intended audience.

Examples of good market practice

Alongside the areas requiring improvement, the Authority identified examples of good market practice across the sectors reviewed.

These included regular reviews of marketing policies, structured compliance monitoring programmes, standardised disclosure templates, marketing compliance checklists and enhanced oversight controls designed to support fair and transparent communications.

Supporting consumer protection and market integrity

Christopher P. Buttigieg, Chief Officer Supervision at the MFSA, said: “Consumers and investors should be able to rely on marketing communications that are fair, clear and not misleading. Through our Outcomes-Based Supervision framework, we continue to engage with industry to strengthen standards, promote transparency and support informed decision-making across Malta’s financial services sector.”

The Dear CEO Letters set out the Authority’s expectations and provide guidance to licensed entities on addressing identified shortcomings and enhancing compliance with applicable regulatory requirements.

The MFSA said it will continue engaging with firms as part of its three-year supervisory cycle and will assess the extent to which the expected compliance outcomes have been achieved.

The post MFSA highlights marketing compliance findings from 2025 Outcomes-Based Supervision review first appeared on The Malta Business Weekly.

In a statement, the Maltese government welcomed the Commission’s recommendation, describing it as recognition of the country’s strong fiscal performance.

Malta’s deficit fell to 2.2% of Gross Domestic Product (GDP) in 2025, significantly below the 3% limit set under EU fiscal rules. The country had been placed under the Excessive Deficit Procedure in 2024 when its deficit stood at 4.9% of GDP.

The government said the improvement exceeded the targets agreed with the European Commission and was achieved ahead of schedule.

According to Eurostat data cited by the government, the average budget deficit across the European Union stood at 3.1% of GDP, compared to Malta’s 2.2%.

The statement noted that several EU member states continue to record deficits at or above the 3% threshold, including Belgium, France, Italy, Austria, Poland, Romania, Slovakia, Finland, Hungary, Bulgaria and Croatia. While Malta brought its deficit below the threshold last year, Bulgaria and Croatia exceeded the limit for the first time.

The government argued that the reduction in the deficit was driven by economic growth rather than austerity measures. It pointed out that Malta remained the only EU country last year not to increase prices for electricity, gas, petrol and diesel through state support measures.

The statement also highlighted that the fiscal improvement came despite what it described as the largest tax cut in Malta’s history, alongside increases in pensions and social benefits.

The European Commission has also projected a further improvement in Malta’s public finances in the coming years, the government said.

The government described the recommendation as another positive endorsement of its economic policies, arguing that sustained economic growth has enabled it to support families and businesses while strengthening public finances.

It added that the result provides a solid foundation for the implementation of its electoral programme, following the mandate it received in last Saturday’s general election.

The post European Commission confirms Malta met fiscal targets ahead of schedule first appeared on The Malta Business Weekly.

Total assets surpassed €1.2 billion in 2025, while total equity improved by nearly 6% to just under €300 million, supported by disciplined investment and a deliberate focus on strengthening the group’s balance sheet. 

The year saw several significant milestones across the group. Premier Capital, its McDonald’s business, opened its 200th restaurant across its six markets with the Mrieħel store in Malta marking the occasion. iSpot expanded to 51 stores in Poland, becoming the largest Apple Premium Reseller in a single European country. During the year, Hili Ventures also acquired a stake in Bank of Valletta as part of its broader investment strategy. 

Chairman Archie Bethel said: “2025 was another year of measured progress for Hili Ventures as we continued to strengthen our businesses in a demanding global environment. These results reflect the resilience of our operations, the strength of our leadership teams and the commitment of more than 12,500 people across the group. Looking ahead, we remain focused on disciplined growth, strategic capital allocation and ensuring that each operation is well positioned within its respective market.” 

With 2026 underway, Hili Ventures is continuing to build on this momentum. Premier Capital will open a further 15 restaurants across its six markets, while iSpot is set to add three new Apple Premium Reseller stores as it consolidates its position in Poland. Beyond its operating businesses, Hili Ventures will sharpen its focus on positioning itself as a capital allocation platform, continuing to build long-term value across the portfolio. 

The post Hili Ventures reports €70m profit before tax in 2025, eyes further expansion in 2026 first appeared on The Malta Business Weekly.

This was one of two statements that the NSO withheld last Friday, citing election rules which prohibited it from publishing statements that could influence voters on what is known as the day of reflection before the election.

The NSO, however, had published such figures on the day preceding the 2022 election.

In its statement Friday, the NSO said the increase reported under Malta Government Stocks (€942.4 million) was the main contributor to the rise in debt. Higher debt was also reported under Treasury Bills (€249.9 million) and Euro coins issued in the name of the Treasury (€5.4 million).

This increase in debt was partially offset by a drop in the 62+ Malta Government Savings Bond (€37.7 million) and Foreign Loans (€2.3 million). Moreover, higher holdings by government funds in Malta Government Stocks resulted in a decrease in debt of €18.7 million.

The NSO said that by the end of April 2026, the Government’s Consolidated Fund reported a deficit of €65.5 million.

Between January and April 2026, Recurrent Revenue amounted to €2,855.7 million, €635.7 million higher than the figure reported a year earlier. The largest increases were recorded under Income Tax (€347.5 million), Value Added Tax (€102.0 million) and Grants (€100.4 million) . On the other hand, lower revenue was recorded under Fees of Office (€8.5 million), Dividends on Investment (€5.1 million) and Sales – Others (€1.6 million).

Total expenditure by the close of April 2026 stood at €2,921.1 million, €439.8 million higher than the previous year.

During the reference period, Recurrent Expenditure totalled €2,578.6 million, an increase of €359.4 million compared to the €2,219.2 million reported the year prior. The main contributor to this increase was a €191.8 million rise reported under Programmes and Initiatives. Further increases were also recorded under Contributions to Government Entities (€65.9 million), Personal Emoluments (€59.9 million), and Operational and Maintenance Expenses (€41.7 million).

The main developments in the Programmes and Initiatives category involved higher outlays towards Social security benefits (€60.6 million), Medicines and surgical materials (€17.0 million) and Energy support measures (€16.6 million).

The interest component of the public debt servicing costs totalled €105.0 million, an increase of €10.7 million when compared to the previous year.

By the end of April 2026, Government’s capital spending amounted to €237.6 million, €69.7 million higher than the comparative period in 2025. Higher outlay was, among others, reported towards Road construction and improvements (€19.6 million), Development of a second electricity interconnector (€14.4 million) and Property, Plant and Equipment (€11.8 million). The rise in spending was partially offset by drops recorded under the Investment Incentives (€15.1 million) and Investments in Physical Assets (Agricultural EU funds) (€6.0 million).

The difference between total revenue and expenditure resulted in a deficit of €65.5 million being reported in the Government’s Consolidated Fund at the end of April 2026, in comparison to the €261.4 million deficit registered the year prior. This difference mirrors an increase in total Recurrent Revenue (€635.7 million), coupled with a lower rise in total expenditure, which consists of Recurrent Expenditure (€359.4 million), Interest (€10.7 million) and Capital Expenditure (€69.7 million).

The post Government debt reaches nearly €12 billion – NSO first appeared on The Malta Business Weekly.

The MSE Equity Total Return Index ended the month in positive territory for the fourth consecutive month, gaining 0.6% to finish at 9,500.693 points. A total of 34 equities were active during May, with 13 posting gains while 16 closed in the opposite direction. Total turnover amounted to €5.9m as a result of 885 transactions.

The MSE Corporate Bonds Total Return Index also headed north with an increase of 0.2%, to finish the month at 1,157.474 points. Out of 111 active issues, 64 advanced while another 33 issues fell. The 4.4% Central Business Centres plc Unsecured € 2027 registered the best performance with a 6% increase to close at €97.50. On the other hand, the 5.2% HH Finance plc € Secured Bonds 2035 recorded a negative 2.7% movement to close at €97.19.

The MSE MGS Total Return Index posted a positive 1.5% movement, to end the month at 966.518 points. A total of 54 issues were active, as 31 closed in the green while another 16 lost ground. The 3.5% MGS 2034 advanced by 2.9% to close at €99. Conversely, the 1% MGS 2031 retracted by 2.2% to close at €89.70.

Top 10 Market Movers

Bank of Valletta plc was the most liquid equity on the MSE in May, with 953,019 shares traded across 151 transactions, generating €1.9m in monthly turnover. Despite the heavy activity, the banking equity shed 5.7% over the month, closing at €1.98, having reached a monthly high of €2.10.

HSBC Bank Malta plc slipped by 2.1%, closing at a monthly low of €1.41. Trading activity included 173,188 shares swapping hands across 46 transactions, worth €248,017.

APS Bank plc witnessed 173 transactions covering 522,998 shares and generating €288,260 in monthly turnover. The equity maintained its upward momentum, as it advanced 5.7% over the period to close at €0.56. The banking equity ranged between a monthly low of €0.505 and a high of €0.57.

FIMBank plc climbed 18.5% during the month, to close at $0.16, its monthly high. The equity attracted seven deals covering 215,390 shares, with $28,631 generated in monthly trading value.

RS2 plc closed May under pressure, falling to a price level of €0.25, translating to a 12.6% decrease in value. The equity had traded at a high of €0.30 during the period before retreating steadily, with 124,126 shares changing hands across 20 deals and generating €31,853 in monthly turnover.

Simonds Farsons Cisk plc was among the month’s stronger performers, rebounding 15.9%. Trading activity saw 9,236 shares change hands across 20 transactions, generating €56,743 in monthly value, with the equity ranging between a low of €5.75, before closing at a high of €6.20.

Malta International Airport plc closed the month at €6.20, edging up 0.8% over the period. The equity traded 72 times across 167,303 shares, totalling €1m in turnover. The equity oscillated between a low €6 and a high of €6.20.

LifeStar Insurance plc was the month’s best performing equity, surging 146.2% to close at its monthly high of €0.65. A total of 18,249 shares exchanged across six deals, generating €10,917 in turnover.

Mapfre Middlesea plc retreated 13.4% to close at a price level of €1.36. The equity peaked at €1.57 before drifting lower, finding support above €1.30. A total of 20,184 shares were exchanged across 23 deals, totalling €27,355 in monthly trading turnover.

VBL plc was the sharpest decliner, shedding 15.2% to close at €0.195. A sole transaction accounted for the entire month’s activity, as 14,500 shares were exchanged and €2,828 in turnover was recorded.

Company Announcements

HSBC Bank Malta plc reported a profit before tax of €21.3m for the three-month period ended March 31, which represents a 24% decrease compared to the same quarter of 2025. This decline was primarily attributed to lower revenue, which fell by €8.1m, because of narrowing interest rate margins and the impact of the bank’s tactical decision to reduce its commercial real estate exposure. Consequently, the Board has recommended a gross interim dividend of €0.036 cents per share, reflecting a 60% payout ratio.

Simonds Farsons Cisk plc reported revenue of €106.5m for the year ended January 31, 2026, a 4.6% increase from the previous period. The Group recorded profit after taxation of €17.2m for FY2026. The outperformance was driven by a lower overall taxation charge, reflecting the recognition of accumulated investment tax credits as a deferred tax asset, an assessment that differed from the original forecast. The year was also marked by the completion of the food business spin-off on October 6, 2025, Quinco plc, which generated a one-off fair value gain of €21.9m recognised in the income statement.

The Board of Trident Estates plc approved the annual report and financial statements of the Company for the financial year ended January 31, 2026. Group revenue increased from €5.5m in the previous financial year to €6.1m, representing growth of 10%, primarily driven by the increasing occupancy at Trident Park. Operating profit increased from €3.7m to €4.1m whilst profit after tax increased from €3.3m to €7.4m, representing a 124% increase year-on-year. The Board of Directors has resolved to recommend for the approval of the AGM the distribution out of profits of a final net dividend of €0.75m amounting to €0.017857 per ordinary share. This dividend will be paid on June 26.

Malita Investments plc reported a record revenue of €10.6m for the financial year ended December 31, 2025, an increase from the €9.6m recorded in 2024. Despite this growth in top-line income, the Company shifted to a profit after tax of €1.9m, down from €6.4m profit in 2024, significantly impacted by a €13.4m variance in revenue from service concession arrangements and rising administrative and maintenance provisions. The Board has recommended that no dividend will be declared for 2025.

In addition, Malita Investments plc has announced that, following financial support secured from local and international lenders, a comprehensive preparatory programme has been completed and works on its Cospicua and Qrendi Housing Projects are set to resume imminently. The resumption is expected to drive steady progress toward project completion and underpin the long-term stability and viability of the Company’s operations.

The Board of MaltaPost plc approved the unaudited condensed consolidated interim financial statements for the six-month period ended March 31, 2026. During the period, the Group reported improved financial results, with profit before tax rising to €3.6m from €3.2m in the same period last year. Revenue increased to €24m, supported mainly by solid performance in parcel and logistics activities, whilst expenditure also rose to €20.5m from €18.6m.

This article, which was compiled by Jesmond Mizzi Financial Advisors Limited, does not intend to give investment advice and the contents therein should not be construed as such. The Company is licensed to conduct investment services by the MFSA and is a Member of the Malta Equity Exchange and a member of the Atlas Group. The directors or related parties, including the company, and their clients are likely to have an interest in securities mentioned in this article. For further information contact Jesmond Mizzi Financial Advisors Limited, 16 Central Business Hub, Level 3, Mdina Road, Attard ATD 9036, or on Tel: 21224410, or email info@jesmondmizzi.com

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Malta’s payments landscape is undergoing a steady transformation driven by digital innovation, evolving customer expectations, and developments at European level. The increasing availability of instant payments and other electronic solutions is reshaping how individuals and businesses transfer money, placing greater emphasis on speed, security and convenience.

Within this context, the Central Bank of Malta (‘Central Bank’) continues to promote a gradual transition towards more efficient and resilient payment methods, while ensuring that existing instruments remain fit for purpose. The updates to Directive No. 19 on the Use of Cheques and Bank Drafts (‘Directive’) should be seen against this backdrop, ensuring that cheque usage remains proportionate, transparent and aligned with a modern payments’ ecosystem.

As background, the Central Bank acting in its capacity as the authority responsible for safeguarding the stability and efficiency of Malta’s payments landscape, first issued Directive No. 19 in 2021. The Directive came into force on 1 January 2022 and was subsequently amended in 2024.

The Directive was introduced to address recurring risks and operational challenges associated with the issuance and negotiation of cheques and bank drafts, including misuse, inefficiencies in processing and delayed settlement. By setting out clear obligations for issuers and beneficiaries it supports improved governance in the use of such payment instrument while complementing Malta’s broader shift towards more secure and efficient digital payment channels.

In 2025, the Central Bank published an analysis on The Usage of Cheques in Malta, that revealed a sharp decline of 78% in cheque usage between 2019 and 2024. This trend reflects a widespread take-up of digital alternatives based on the implementation of European regulatory frameworks.

In light of these developments and based on the Eurosystem’s comprehensive payments strategy which embrace innovation and forward-looking approach in payments, the Central Bank felt the need to update Directive No. 19. The amendments to the Directive will come into force on 1 January 2027. These updates aim to refine existing procedures and align cheque usage with evolving operational and security requirements, ensuring consistency with current practices. The key changes are outlined below.

Minimum cheque amount raised from €20 to €50

Effective 1 January 2027, cheques may only be issued for amounts of €50 or above. This adjustment is designed to shift routine, low‑value transactions towards digital payment options, such as instant payments, which offer quicker processing and greater convenience.

Limiting this payment instrument to higher‑value payments helps manage resources more efficiently by reducing manual handling costs incurred by institutions and lowering the likelihood of processing errors. For beneficiaries, this shift also promotes the use of digital payment methods, which offer stronger security, faster processing and clearer transaction records. This measure preserves the usefulness of cheques and bank drafts for significant transactions while encouraging more modern, efficient payment behaviour for everyday needs.

Cheques valid for three months

The updated framework shortens the validity of cheques from six months to three months. This reduces the risk that a cheque remains outstanding for an extended period, where it may be misplaced, misused, or simply not presented in a timely manner. A shorter validity window also supports a more efficient movement of funds, as the clearing and settlement process begins more promptly once the cheque is presented for processing.

A shorter validity period for cheques lead to a smoother settlement cycle, giving beneficiaries faster access to funds and a clearer view of their account activity. At the same time, institutions benefit from streamlined operational workflows, simplified account reconciliation, and fewer outdated instruments requiring follow‑up. Collectively, these improvements applicable on 1 January 2027, contribute to a more predictable and reliable processing environment for all parties involved across the payments chain.

Furthermore, the validity of bank drafts will remain 6 months given that this particular payment instrument is mainly used for larger transactions such as property purchases. Bank drafts are considered as more secure when compared to cheques given that the Bank issuer locks the funds upon issuance and thus provides certainty that funds are available.

Mandatory deposit of cheques into a payment account

To enhance transparency and improve the traceability of payments end‑to‑end, the new amendments will require all cheques and bank drafts to be deposited directly into a payment account rather than having the option to encash over the counter, a requirement that comes into force on 1 January 2027. This ensures that each cheque transaction is fully recorded within the banking system. It also supports anti‑money‑laundering controls by ensuring that all fund movements are captured within the payments’ infrastructure.

For beneficiaries depositing cheques and bank drafts into an account it ensures a standardised clearing process, and clearer indications of when funds shall be available, facilitating cash‑flow management and reducing uncertainty. Institutions likewise benefit from reduced cash handling, lower operational and security risks, and improved audit trails, resulting in a more controlled and efficient processing environment.

This update also aligns with Malta’s broader policy objective of strengthening transparency in payment practices. Recent amendments to the Employment and Industrial Relations Act (Cap. 452) require wages payable to third‑country nationals to be settled exclusively by bank transfer or through an electronic transfer executed by a licensed financial institution. Both developments move in the same direction: enhancing transparency, reducing risks of abuse, and supporting stronger oversight across the payments landscape.

Funds credited instantly in the case of over‑the‑counter deposits

Under the new amendments, cheques deposited in person at a branch of the issuing bank should be credited instantly, allowing immediate access to the funds, including cash withdrawal from an ATM. This procedure will also apply from 1 January 2027. By contrast, cheques deposited via an ATM of the same bank will be credited no later than the end of the following business day. The same rules also apply to cheques issued by the Central Bank on behalf of the Government of Malta, including tax refunds and government bonus cheques.

For beneficiaries, such changes provide quicker access to money and clear timeframes that support cash‑flow planning and reconciliation. For institutions, it enables more efficient in‑house processing, reduces risk exposure, and limits cash handling steps.

Key Takeaways

Overall, the updated Directive reflects a balanced approach between preserving payment choice and encouraging the adoption of more efficient alternatives. While cheques and bank drafts will continue to serve specific use cases, particularly for higher-value transactions, their role in everyday payments is expected to diminish further over time in favour of faster and more secure electronic solutions.

Looking ahead, the Central Bank will continue to support initiatives that strengthen the efficiency, resilience and strategic autonomy of the payments’ ecosystem. This includes fostering the uptake of instant payments and promoting solutions that enhance transparency, reduce risk, and align Malta with broader European developments in retail payments. In this evolving landscape, the Directive forms part of a wider policy direction aimed at ensuring that payment services remain accessible, secure and future-ready.

Dr Stephanie Gatt is Deputy Head Legal Department at the Central Bank of Malta

Gianella Azzopardi is Principal Expert Payments Policy and Compliance Office at the Central Bank of Malta

The post Cheque payment instrument: Key updates to Central Bank of Malta Directive No. 19 first appeared on The Malta Business Weekly.

As the financial services landscape grows increasingly digital and complex, the need for informed decision-making by citizens has never been more vital. To lead this effort locally, Sarah Pulis has been appointed as Malta’s Financial Literacy Ambassador. In this capacity, she joins an elite network of experts across the continent supporting the EU’s Savings and Investments Union, a flagship initiative designed to make financial markets more accessible and transparent for everyday citizens.

Tasked with bridging the gap between high-level policy and the “man on the street,” Pulis aims to demystify the world of finance for the Maltese public. In the following interview, she discusses her vision for the role, the specific challenges facing local households, and the roadmap for building a more financially resilient nation.

As Malta’s Financial Literacy Ambassador, how will you go about your duties?

Financial literacy isn’t confined to policy documents or classrooms; it plays out in our everyday lives. It is used when someone receives their first salary, considers taking out a loan, decides whether to start investing, or tries to understand if an investment offer is genuine.

As Malta’s Financial Literacy Ambassador, my role is to make these moments less confusing. This means working with Malta’s many stakeholders, including government bodies, regulators, and social policy actors, while engaging directly with the public. Clear communication, trust, and consistency are key.

What are your main priorities?

My priorities come from what we see happening in everyday life in Malta.

One key priority is helping people move from saving to informed investing. Maltese households are disciplined savers, but many people hold back from investing because they simply do not feel confident enough. Building a basic understanding of risk, diversification, different types of financial products, and the benefits of long-term planning is essential.

Another key priority is keeping people safe in a fast-moving digital environment. Scams are more sophisticated than ever and they affect people across all ages and backgrounds. Awareness needs to be practical, timely, and continuous, given the speed at which scams evolve.

Reaching people at different stages of life is also important. Financial literacy is most effective when it meets people where they already are, whether through media, schools, workplaces, or community settings, rather than expecting them to seek out purely formal education environments.

What do you perceive to be the biggest challenges the man on the street faces vis-à-vis financial literacy? How can you help?

A common challenge is uncertainty. Financial products, terms, and conditions can appear complex, and many people fear making the wrong choice, which can lead to inaction.

My role is not to advise individuals or simplify decisions for them, but to help reduce barriers to engagement by promoting clear, neutral, and consistent information. Encouraging people to ask questions, take time to consider offers, and seek reliable sources can already make a meaningful difference.

There is also a tendency to rely on familiar options, sometimes without reassessing whether these remain suitable. Promoting a basic understanding of risk and limitations can support more balanced decision-making without prescribing specific outcomes.

Digitalisation adds another layer. While many people are comfortable using digital tools, they may not always fully appreciate the implications of what they agree to online. Helping people recognise warning signs and understand where to find trusted information is an important part of the broader effort.

In February, the MFSA, in collaboration with the European Commission’s Reform and Investment task force (SG REFORM), the Organisation for Economic Co-operation and Development (OECD), and the Ministry for Finance of Malta, presented findings of a survey on the financial literacy and investment behaviours of Maltese retail investors. Those results showed that Malta’s overall financial literacy levels are slightly above the OECD average, reflecting strong budgeting and saving habits. But they also revealed persistent gaps in investment knowledge and participation. How do you intend to tackle this?

The survey results from the EU-funded Technical Support Instrument project tell an important story. Malta performs well overall, particularly in budgeting and saving, but clear gaps remain in investment knowledge and participation. Addressing these gaps starts with getting the basics right, such as explaining how risk and return are linked and why diversification matters. There are also widespread misconceptions about certain financial products, such as bonds, guarantees, and perceived safety, which need to be tackled directly.

Addressing this does not mean encouraging greater risk-taking. It means supporting a better understanding of basic investment concepts, while also addressing common misconceptions around perceived safety. The objective is to help people understand their options more clearly so that any decisions they take are better informed and aligned with their individual circumstances.

In March, the EU’s Commissioner for Financial Services and the Savings and Investments Union, Maria Luís Albuquerque, convened the first virtual meeting of national financial literacy ambassadors. Can you tell us what was discussed and any plans of action agreed upon?

The first meeting of EU Financial Literacy Ambassadors made it clear that Malta’s experiences mirror those seen across Europe. Digital fraud, low investor confidence, and gaps between awareness and understanding are common themes.

There was strong agreement that financial literacy plays a central role in building trust in financial markets and supporting the EU’s broader goals under the Savings and Investments Union. Ambassadors were seen as important bridges between policy-level objectives and practical, everyday realities. Going forward, the focus will be on sharing practical experiences, aligning messages where possible, and learning from what works across Member States.

Why is financial literacy such a big focus of the European Commission?

Financial literacy is a major focus of the European Commission because it is essential to achieving the EU’s objective of a genuine Savings and Investments Union. When citizens understand how to save, invest, and manage risk, they are more likely to participate confidently in financial markets, allowing household savings to be channelled into productive investments that support growth and innovation across the EU. At the same time, stronger financial literacy helps protect consumers, promotes inclusion, and builds trust in the financial system, all of which are critical for a resilient and integrated European economy.

Looking ahead

While the road to financial literacy is a long-term journey, Pulis remains optimistic about the impact of these collective efforts.

“One of my biggest challenges is maintaining momentum,” Pulis notes. “Financial products and digital risks evolve quickly, and our communication must keep pace. However, financial literacy is a shared responsibility. While institutions provide the tools, the goal is to empower the individual. In the long run, even small, consistent improvements in understanding can make a meaningful difference to a family’s financial resilience.”

The post Empowering a financially resilient Malta first appeared on The Malta Business Weekly.

During the period, the Group delivered a resilient core operating performance, supported by strong capital and liquidity positions. Solid business activity sustained core income, with net interest income benefiting from continued lending growth and disciplined treasury management, underpinned by a stable, high‑quality funding base. Net Fee and Commission Income remained stable, reflecting strong customer activity and reinforcing the Group’s income diversification strategy.

The bottom line profitability was shaped by specific, non‑recurring factors, including heightened geopolitical tensions that led to increased financial‑market volatility. While not impacting the Group’s core operating activities, customer behaviour or portfolio performance, this resulted in an unrealised valuation impact on the equity investment portfolio. Consequently, a net trading loss of €3.6 million was recorded when compared with a gain of €5.5 million in 2025. This was not material and did not affect the Group’s capital strength or liquidity position.

Profitability was also influenced by higher impairment charges, reflecting specific and identifiable credit developments rather than a deterioration in the broader credit environment. The Group recognised an impairment charge of €5.6 million during the period, primarily driven by the continued material growth in the commercial lending book and the increase in stage 1 assets. Notwithstanding these charges, asset‑quality indicators remained strong, supported by prudent underwriting standards and disciplined credit‑risk management.

Performance highlights

• Profit Before Tax amounted to €54 million, down from €67.1 million.
• Net Interest Income stood at €100.2 million, up from €92.5 million.
• Net Fee and Commission Income increased from €20 million to €20.2 million.
• Operating costs totalled €61.7 million, up from €52.8 million.
• Cost‑to‑income ratio increased to 51.8% from 44.7%.
• Return on Average Equity (pre-tax) decreased to 14.2% from 17.9%.
• Deposits increased by €351.9 million, surpassing the €14.1 billion mark.
• Total assets stood at €17 billion, up from €16.5 billion in December 2025.
• The credit portfolio reached €8.3 billion, up from €8 billion in December 2025.
• Net Asset Value per share stood at €2.4, up from €2.3 in December 2025.
• Capital ratios remained strong and above regulatory requirements.

The Group continues to monitor the evolving geopolitical environment and its potential impact on the Maltese economy and the financial system and maintains enhanced monitoring across key risk dimensions. The assessment remains that Malta entered the current period of heightened geopolitical uncertainty from a position of relative strength, supported by resilient economic growth, low unemployment, moderating inflation and sound public finances.

The Group’s risk management framework incorporates forward looking scenario analysis and early warning indicators to identify emerging stresses. To date, these have not signalled any material deterioration in customer behaviour or portfolio performance. This approach ensures that the Group remains well positioned to absorb potential shocks and continue supporting customers and the wider economy amid an increasingly uncertain global backdrop.

Commenting on the Group’s performance, Chairperson Dr Cordina stated, “The Group delivered a strong start to the year, reflecting resilience, a disciplined approach and solid fundamentals. This performance was achieved in a stable economic environment, alongside the expected normalisation of earnings, interest rate stability and a renewed period of geopolitical uncertainty.

From a market standpoint, the Share Buyback Programme continued to support trading activity in the Bank’s shares, while preparations are now underway for the issuance of a €300 million Senior Preferred Instrument, subject to regulatory approval. Supported by a strong capital base, resilient day‑to‑day performance and consistent execution of our strategy, the Bank’s share price rose to highs of €2.14 during the period.

Looking ahead, the Group remains well positioned to deliver a profit before tax for the year in the range of €210 million to €250 million, in line with previous guidance. We also remain committed to rewarding our shareholders and intend to maintain our policy of distributing up to 50% of after‑tax profits, subject to prevailing market conditions.”

CEO Kenneth Farrugia said, “I am pleased to report another strong performance by the BOV Group, building on the positive results delivered in 2025. During the first quarter of 2026, the Group sustained resilient operating performance, continued to grow its balance sheet and maintained sound asset quality, sustained lending and treasury activities, supported by a diversified business model.

The depth of our deposit base reflects the confidence our customers place in our credibility and long‑term approach. The growth and diversification of our corporate loan book support key commercial economic sectors, while the consolidation of our corporate services under one roof and the broadening of our service offer through non‑life insurance further strengthen our position as the Bank of Choice in Malta.

These results reflect strong fundamentals and continued customer trust. With the largest network of customer touchpoints in Malta, and a resilience underpinned by strong investment‑grade credit ratings, the Group is uniquely positioned to deliver stability and consistency while remaining deeply embedded in Malta’s economy. As we enter the final year of our strategic cycle, our focus remains on disciplined execution, responsible banking and the creation of long‑term value for all our stakeholders.”

Financial performance

Net Interest Income for Q1 amounted to €100.2 million, an increase of €7.7 million when compared to 2025. Growth was recorded in both loans and advances to customers underscoring the relevance of BOV’s products within the lending sector and equally important income from disciplined treasury management. Net Fee and Commission Income is reported at €20.2 million, a marginal increase of 1.1% from the same quarter last year, reflecting resilient customer activity with continued strength in cards and credit-related fees, consistent with ongoing shifts towards digital payment solutions.

Operating costs at end March 2026 totalled €61.7 million, an increase of €8.9 million over Q1 2025. This reflects higher personnel and IT costs, depreciation charges and contributions to the Depositor Compensation Scheme. As a result, the cost‑to‑income ratio increased from 44.7% in 2025 to 51.8%, consistent with the expected low‑to‑mid‑50% range outlined in the forward guidance.

The return on average equity (pre-tax) declined to 14.2%, down by 3.7 percentage points compared to 2025, consistent with the expected range communicated earlier this year and very much influenced by the one off profitability movements and the increased equity base. Earnings Per Share decreased to €0.056 compared to €0.069 for 2025 (restated for bonus issue in Q2 2025), reflecting the lower profit before tax for the quarter and the ongoing share buyback programme that partially mitigated the decline.

Asset quality indicators remain strong, with the NPL ratio improving to 1.57%, while ECL coverage ratio for credit-impaired assets stood at 55.1%, reflecting a sensible provisioning stance while continuing to benefit from improving portfolio quality and dynamics.

Financial position

Total assets stood at €17 billion in March 2026, up by approximately half a billion when compared with 2025. This represents a new high for the Group, with growth reflecting sustained balance-sheet expansion, consistent with the strategic focus on supporting domestic economic activity while maintaining strong liquidity and funding discipline. The Treasury portfolio has now reached €7 billion in Q1 2026, an increase of €119.3 million, reflecting the Group’s deployment of excess liquidity into high-quality debt securities.

The credit portfolio continued to grow, with the balance reaching €8.3 billion in the first quarter, reflecting strong momentum in customer lending. As a result, the gross loan-to-deposits ratio increased from 59% in December 2025 to 59.5% during the quarter. Deposits experienced another significant increase of €351.9 million or 2.6% during the first quarter of 2026, surpassing the €14.1 billion mark, reflecting the strength of the Group’s retail franchise driven by an increase in both retail and business deposits. As a result, the Group maintained very strong liquidity position, with the LCR ratio of 385.8% well above the minimum regulatory requirements.

The Group’s total equity closed at €1.5 billion, marginally higher from December 2025 with the Net Asset Value per share standing at €2.4 per share (December 2025: €2.3 per share), further strengthening the underlying book value position. The Group’s capital ratios remained strong and comfortably above regulatory requirements.

The post BOV reports profit before tax of €54 million for first quarter 2026 first appeared on The Malta Business Weekly.