FitchRatings (www.fitchratings.com) has confirmed that Malta does not face same bank system risks as Cyprus.
Research it carried out showed that “while both Malta and Cyprus seemingly have large banking sectors that substantially exceed the size of their economies and that rely to some degree on funding from non-resident depositors, a closer examination reveals substantial differences.”
In fact, Fitch has given Malta an ‘A+ with a stable outlook’ rating.
Fitch reported that Malta’s whole banking sector has assets worth 789% of its GDP, the second largest in the Eurozone, but when breaking down this figured, it noted that only 218% of this figur related to core domestic banks (compared to Cyprus’ 466%). Accordingly, the contingent liability placed on Malta is much less than that in Cyprus.
The Maltese banking system is also less susceptible to a destabilizing withdrawal of non-resident deposits as most of these deposits are in international banks and relate to deposits of parent banking groups, which put forward a lower risk of capital flight.
