September 21, 2020

Cayman Islands hedge fund bank launched in Malta


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FCM Bank, a Maltese bank owned by a Cayman Islands hedge fund and geared towards high net-worth individuals, was officially launched yesterday at its headquarters in Paceville.

The bank is owned by the Fortelus Special Situations Master Fund Ltd, which is itself managed by the London-based Fortelus Capital Management LLP. It was set up with an initial investment of €20 million.

Fortelus has been active in Malta since 2007, and efforts to set up FCM bank began with the receipt of a banking licence in 2010.

Actual operations began in August 2011, when Michael Warrington was recruited to serve as the bank’s CEO and a core team was set up. Mr Warrington is a banker and accountant by profession: The move marked his return to banking after seeking pastures new in 1992

The bank is now ready to offer services to customers, and Mr Warrington noted that it will initially start by offering savings products – the first will be launched on 8 June. The bank’s strategy is to attract higher value customers: A minimum deposit of €10,000 will be required.

Its early investments are European covered bonds, which are set to be followed up with the acquisition of European corporate loans. In the long term, however, FCM also plans to lend directly into the Maltese market, aiming to offer sizeable personal loans backed by appropriate security.

The bank is based at Aragon House in Paceville, and while it plans to look into opening a small number of additional branches eventually, it is not aiming to become a widely-branched institution.

Mr Warrington said that the bank aimed to offer an innovative service, paying a particular focus to the use of information technology, even to attract overseas customers.

He remarked that the bank was designed for conservative risk, noting that trust was what the banking industry was all about.

Fortelus founder and chairman Tim Babich noted that the banking crisis had helped open up a number of opportunities for new banks which are not burdened by legacy asset books and which can make use of newer, more effective, technology.

He stressed that the bank was designed to have a strong Maltese base. Its five-member board of directors comprises three Maltese directors, including Mr Warrington.

In his own address, Finance Minister Tonio Fenech welcomed the bank’s decision to adopt transparency, honesty and integrity as its three core values, noting that these were essential to build trust and that such a business philosophy also helped safeguard the reputation of Malta’s banking sector.

The minister said that Malta’s good reputation was being acknowledged internationally, citing a recent World Economic Forum report which placed Malta among the best 15 world jurisdictions.

A total of 25 banks are registered in Malta, and Mr Fenech noted that this competition was ultimately beneficial to consumers who were being offered increasingly diverse services.

He also insisted that it was not surprising that international investors perceived Malta as an ideal place to launch a new bank, noting how the country’s banking system remained robust throughout an international crisis.

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