Malta-based Merkanti Bank is surrendering its banking licence and has pledged to refund its customers’ deposits in full, in a bid to “streamline” its operations and increase profitability.
In a statement to the Malta Stock Exchange, Merkanti Bank said its board had approved plans to convert the company into an “unregulated entity”, following a similar announcement last month of plans to surrender its banking licence.
At the time, it said surrendering its licence would “enable the Merkanti group to streamline its consolidated cost structure, thereby increasing its profitability going forward”.
All its customer deposits are set to be repaid in full, with the move to an unregulated entity taking place over the “coming months”.
“The company does not expect the process will have a material impact on the financial position of the company, nor will it impact on the company’s ability to meet its obligations to its bondholders”, the bank said.
The announcement follows reports last month that around 20 employees in Malta were being made redundant amid the bank winding down its activities. The company did not respond to earlier requests for comment.
The process to surrender its licence is subject to regulatory approval, the bank noted.
Merkanti Bank Ltd is majority owned by Merkanti Holdings plc and minority shareholder Scully Royalty Ltd – which in turn co-owns Merkanti Holdings plc, according to the Malta Business Registry.
Merkhanti Holdings was converted into a public limited liability company in May 2019, issuing a bond on the Malta Stock Exchange worth €25 million. The bond bore an original interest rate of 4% and was due to mature this year.
In 2023, Merkanti Bank made pre-tax profits of just under €2.4 million, the most recent company accounts available at the Malta Business Registry show. That year, it held €58.5m in assets and €39.6m of liabilities.
The bank describes itself as a “speciality trade and structured finance bank”, according to its website, which lists the start of operations in 2016 after it bought out BAWAG Malta Bank. Merkanti Bank Ltd was listed on the Malta Business Registry in 2003.
Its main activities focus on the lending and advancing of funds to Merkanti Holdings-owned companies.
