Financial sector could grow to 15% of GDP – survey
Main driver will be company relocation to Malta
A survey of 43 professionals working in Malta’s financial services industry reveals the clear majority expect the sector to enjoy strong growth over the next five years.
The sector currently contributes just over 12% of Malta’s GDP, but 87% of the respondents of the Managing Partners Group survey believe this will be higher by 2022, with 70% anticipating it will account for 15% or more.
One of the key reasons behind this growth will be an increased focus on innovation, the asset management group said. Some 16% of those interviewed expect product innovation in the Maltese financial services sector to increase ‘dramatically’ over the next five years and a further 68% anticipate some sort of improvement here.
READ: Malta falls to lowly 85th on international financial services index
The main driver behind this trend will be more financial services companies locating to Malta – the view given by 71% of respondents – followed by 50% who believe the country’s flexible legislative and regulatory system will also help.
When it comes to which sectors in Malta’s financial services industry are likely to see growth between now and 2020, 82% anticipate fund administration will grow, followed by asset management, asset servicing and corporate banking: 74% of those interviewed expect these sectors to grow over the next three years.
“The results of this survey and the highly positive outlook therein are primarily driven by the growth that the industry is currently experiencing particularly in the asset management, insurance and private wealth sector,” Kenneth Farrugia, chairman of Finance Malta, commented.
“Despite Malta’s relatively recent entry into the international financial services arena, innovation-led developments such as the Notified AIF (NAIF) in the asset management sector, the Protected Cell legislation in the insurance sector, which I must add is unique in Europe, as well as the presence of a highly competitive securitization framework, have attracted a number of international operators to Malta.
“This has, in turn, brought about a marked increase in business as a result of an increase in the business being managed through existing operators but equally so driven by the new financial services operators that are setting up in Malta.”
Joe Portelli, chairman of the Malta Stock Exchange, also welcomed the results.
“Malta offers a highly competitive, cost-effective solution for any company looking to establish itself within the EU,” he said.
“As more companies consider their Brexit options, we anticipate that Malta’s qualities as a well-regulated, English-speaking financial centre with a hardworking and educated workforce will prove to be very attractive to them.”