In these last 20 years Malta has changed drastically. It has registered substantial success in keeping economically buoyant in difficult times. But one of the biggest steps the country took was when it ventured, prudently but shrewdly into the financial services sector, moving from a small player to a recognised and envied jurisdiction.
Twenty years ago saw the birth of a Malta-based First International Merchant Bank Ltd, which later changed its name to FIMBank plc. It is no coincidence that the growth of the financial services world in Malta happened at the same time and rhythm as that of FIMBank.
The journal met up with Dennis Camilleri, FIMBank’s First Vice-President - Trade Finance, to find out all about the bank, its positioning and its special connection to Libya.
Insights derived from Dennis’ experiences:
Regardless of which growth strategy is selected, a firm’s infrastructure must be in a position and up to standard to support successful execution.
FIMBank is headquartered in Malta. The island has provided the Bank with a stable environment, strategic location and access to a pool of highly educated and language-skilled bankers and trade finance specialists.
A holistic socio-economic -political challenge exists in Libya and this requires hope, trust and commitment. The world needs to be patient and be ready to provide all the necessary support so that Libya will become an active player in the global economy.
Focus on the core competency, pooling of knowledge and capabilities, to harness the unique ability that the company has. Avoid costly distractions.
The bank was set up to specifically venture into a specialised, niche market. To penetrate and be of service in the market the bank expanded its knowledge-base, which was pivotal to its success.
The success of any business comes from the ability to create and maintain meaningful relationships. Remember that when you connect with others in a meaningful way, you automatically become valuable resources for each other.
WHAT IS THE MAIN STRENGTH OF FIMBANK?
Dennis Camilleri: FIMBank has from its inception focused on Trade Finance. We started out as a simple set-up in a modest office in Sliema; a boutique bank offering specialised trade finance services, with a strong focus on the emerging markets. I believe that our main strength is that of our focus on our core competency – trade finance. Forfaiting, Factoring and Structured Trade Finance remain our three strategic pillars on which we will continue to build our offering of diversified trade finance solutions to customers worldwide. And we are currently present in Lebanon, Egypt, Russia, Dubai, India and Brazil. The Bank has diversified its trade finance activities worldwide and now has a physical presence in more than ten financial centres worldwide.
NO DOUBT THIS REQUIRES A DEEP KNOWLEDGE OF THE MARKETS AND COMMODITIES.
DC: We definitely need an understanding not just of the market and the way it fluctuates but also of the clients, the financial strengths and pitfalls surrounding the transactions and the risks involved. We take on most of the risk so we need to know not just what is happening but what will - or could - happen in the future. This understanding of the markets gives us a good edge on our competitors and we have to rely a lot on the expertise of our professional staff. We also use others’ expertise in the field, seeking out strong associates and partners. Today, because of our experience, expertise and reputation, people, clients and banks trust us and are ready to share their own expertise with us, because they know that we can indeed add value to their business.
THIS IS A PARTICULARLY SPECIAL YEAR FOR FIMBANK..
DC: 2013 was a landmark year for us. Burgan Bank and United Gulf Bank, two highly reputable financial institutions forming part of the Kuwaiti conglomerate KIPCO Group, acquired a majority stake in FIMBank. This year their combined percentage shareholding increased to 80%. FIMBank now forms part of the KIPCO Group, one of the largest diversified holding companies in the Middle East and North Africa, with consolidated assets of US$ 30.5 billion. With this move comes the anticipation of significantly improved prospects to take on new business opportunities, to benefit from better funding resources and therefore strengthen FIMBank’s operating performance even further. This development has truly redefined our future capability.
HOW WOULD YOU DESCRIBE YOUR STRATEGY IN ONE SENTENCE?
DC: We are a leading provider of trade finance, forfaiting and factoring solutions and our strategy is to continue developing our footprint by carefully marshalling our unique capabilities and resources, thus increasing our market share and maintaining our competitive position.
IN FEBRUARY, FIMBANK CHAIRMAN DR J C GRECH CHAIRED A CONFERENCE IN TURKEY ABOUT LIBYA TRADE AND INFRASTRUCTURE FINANCE. WHAT WERE THE CONCLUSIONS?
DC: Libya is living a post-conflict reality that is not much unlike what is happening in Egypt and Tunisia. The general consensus at this international conference was that the process of change in Libya will undoubtedly happen, but it will need to take its due course and the international community must be ready and prepared to provide all the necessary support so that Libya will become an active player in the global economy. I would say the main conclusion was for the world to remain patient and be ready to provide the required support.
DURING THE CONFERENCE MANY EXPRESSED THE VIEW THAT NOT ENOUGH HAS BEEN DONE TO REGULARISE AND REGULATE THE MARKET IN LIBYA. WHAT IS YOUR POSITION ON THIS?
DC: In spite of the general sense of alarm that often pervades media reports: Libya is resource rich; it has extensive foreign reserves; there is no Government Debt and banks have high liquidity. If the private sector were to be given the necessary space to operate, with the Government guaranteeing and supervising governance, the process of change could register some early tangible evidence of success, and could gather momentum as well as credibility. The opportunities for foreign investors to participate in this country’s development are there. Libya requires extensive investment in both its hard and soft infrastructure (particularly in the administrative, legal, ICT sectors). Libya’s banking sector can also become more proactive if the necessary legal structures of recourse and title are updated.
THE AIM IS THAT BY 2015 ALL BANKS IN LIBYA WILL HAVE TO CONFORM TO ISLAMIC LENDING STRUCTURES. EVEN LIBYAN GOVERNMENT OFFICIALS THINK THIS IS OVER-AMBITIOUS. IS FIMBANK FOLLOWING SUCH DEVELOPMENTS AND ARE YOU PREPARED FOR IT?
DC: The decision to change the entire system to Islamic Finance by the beginning of next year is considered to be over-optimistic by many. Islamic lending structures can vary in intensity and in enforcement and this is an issue that Libya should decide for itself. The available information on the matter is sparse but we are confident that we can find the right approach to continue to do business in the country. FIMBank has a flexible approach to customers’ requirements and we will of course benefit directly from our new Middle Eastern Bank shareholders’ experience in this field. We are confident that we will be in a position to structure lending facilities, placements and trade related transactions on an Islamic or conventional basis.
FIMBANK NOW BOASTS AN IMPRESSIVE HEAD OFFICE IN ST JULIAN’S. PRESUMABLY THIS MEANS THAT THE BANK IS HERE TO STAY FOR SEVERAL YEARS TO COME?
DC: This is the strongest signal that FIMBank plans to remain in Malta for the long haul. We have constructed a custom-made office block with a capacity of 8,000 square metres of office space to support our requirements and cater for future growth. FIMBank is intrinsically tied to Malta, employing 192 employees (90% of them being Maltese), hundreds of shareholders and depositors and Maltese corporates trading internationally. Malta is a strategic place to do business. It offers an interesting mix of cultures and will surely serve as a launch pad for our next phase of expansion.