According to Sparkasse Bank Malta plc, the consensus among its principals is that the operations of the Bank itself will have limited exposure to Brexit. However, Sparkasse Bank Malta plc, which was established in 2000, acknowledges it will have to keep a watchful eye on the future, especially as it relates to how prospective clients might be impacted. Sparkasse Bank Malta plc says it will have continuous dialogue with its U.K.-based business partners, who may be affected and implement strategies to limit any negative impacts and protect business relationships. After a June 2016 referendum vote, the U.K. withdrew from the European Union on Jan. 31, 2020, an event referred to as Brexit. The deal contains new rules and regulations regarding how the U.K. and EU will coexist, work, and trade together. Therefore, it’s no surprise that banks in the U.K. are having to monitor the possible effects this move could have on business operations post-Brexit.
Brexit Job Exodus Projections and Statistics
When Britain voted in 2016 to exit the EU, analysts like Oliver Wyman projected 35,000 or more financial services jobs would leave Britain. A report by PricewaterhouseCoopers estimated that up to 100,000 financial sector jobs may leave the country because of Brexit. However, according to Ernst & Young Global Limited (EY), so far, there have been no major disruptions or intentional moves by U.K. financial services firms since Brexit. Some of the largest U.K. investment banks have made downward revisions as it relates to staff relocations to the EU since Brexit. Data from EY’s latest Brexit tracker reveals the total number of Brexit-related job relocations from the U.K. to Europe dropped from 7,600 in December 2020 to under 7,400 in 2021. As per the Reuters report in December 2021, the number of finance jobs shifting from Britain to the European Union due to Brexit is less than what was initially anticipated.
Despite regulatory uncertainties and the potential blow to London’s current position as a leading global financial hub, post-Brexit there seems to be some stability and things aren’t spiraling out of control. The U.K. financial sector’s importance to the rest of the EU is evident, as much of the financial activities carried out in Europe are either directly or indirectly performed out of London.
Paul Mifsud, who was appointed Sparkasse Bank Malta plc’s CEO in 2007, was asked in an interview about other geographies of strategic importance to Sparkasse and said, “Another jurisdiction to watch in my opinion is going to be London, because London now is going to be deemed to be a third country and no longer part of the European Union. So we’ll see how that’s going to pan out because there is a world that exists beyond the EU, and it would be interesting to see how they capitalise on that.”
Post-Brexit, Sparkasse Bank Malta says it is hoping for a smooth transition and the continued successful financial relationship between the UK and the EU. It would be to everyone’s benefit to not have any significant deviation between the rules of the EU and the UK. Brexit will present opportunities for businesses to relocate their operations to other EU jurisdictions, and Malta rates highly as a jurisdiction renowned for its economic stability, growth, and position at the forefront of compliance standards. Sparkasse Bank Malta plc, having its head office in Malta, stands to benefit.
When asked about the benefits of Sparkasse Bank Malta plc’s jurisdiction being in Malta, Mifsud said, “Malta is in the European Union. So you have that surety of law in a way, whereby if you are present in the European Union, you also have the right to passport your product cross-border to various other countries within the European Union.”
Donncha Morrissey, Head of the Sparkasse Bank Malta plc Ireland Branch, believes there may be some medium-term effects post-Brexit and it’s important to keep abreast of the current and upcoming negotiations to mitigate those effects. Of utmost importance to the Bank is the agenda regarding financial regulations. The most important element, he stated, is concerning the designation of equivalence and whether that equivalence is granted by the EU to the UK. “What we all want to ensure is that there is financial stability and that equivalence should be the ultimate objective [that] will be gained through a meeting of minds,” said Donncha Morrissey.
Sparkasse Bank Malta plc Ireland Branch Has Limited Exposure Post-Brexit
When asked about the effects of Brexit on the Ireland Branch Donncha Morrissey had this to say: “Given the Ireland Branch was only established subsequent to 2016, we were somewhat limited in our exposure to Brexit. However, we continually must assess our business partners who may be impacted, such as any UK-based alternative investment funds managers (AIFMs) to the funds we may be contracted with or in negotiation with, and also the investor exposure to our funds. Those risks and exposures may be subject to change; we need to manage and mitigate to ensure continued regulatory adherence and ultimately prevent loss of assets and business.” He summed up by reiterating that Brexit took place during the time when Sparkasse Bank Malta plc Ireland Branch was growing its business, which therefore offered some protection to the Bank.
Despite Brexit Effects, Sparkasse Expects To Thrive
The consensus among Sparkasse Bank Malta plc executives seems to be Brexit will certainly affect the way business is conducted. However, there’s optimism the changes won’t significantly affect Sparkasse Bank Malta plc’s ability to provide quality service to its existing clients and to continue to grow its business. If the UK and the EU can manage to obtain equivalence and if they can maintain an amicable and successful relationship in the financial industry, then the future looks bright. Other welcoming news from Ernst & Young is that Dublin and Luxembourg remain the most popular post-Brexit destinations for new EU hubs, though Paris has received the highest number of staff relocations.
Sparkasse Bank Malta plc holds multiple licences and services its Customers as a credit institution and as an investment services firm. Today, the Bank has over €8 billion of assets under custody. The Bank, which is expanding across Europe, is also authorised by the Central Bank of Ireland to act as a Depositary to Irish authorised investment funds. The Bank was granted its licence to provide custody and depositary services in Ireland, and now has a branch location in Dublin.