Source: Times of Malta
Dutch/Bank ING has agreed to stay on as Bank of Valletta’s correspondent bank for US dollars transactions until the end of March, BOV said on Tuesday.
ING had said in June it would pull the plug on its relationship with the Maltese bank on December 14.
At the time, Bank of Valletta said it had intensified its endeavours to engage alternative correspondents to minimise any possible operational disruption to its business and its clients.
On Tuesday, BOV said it is ‘close’ to finalising arrangements with other service providers in order to ensure continuity of USD clearing services.
ING is reportedly keen to cut ties with smaller jurisdictions it considers to be too risky to be worth serving. That de-risking exercise follows a hefty €775 million settlement ING agreed to pay for money laundering violations.
Back in May, a BOV official had told Times of Malta that it was preparing for the eventuality of ING ending its relationship with the bank.
“We are preparing for all eventualities and will find ways and means to widen the pool [of US dollar transaction providers],” the official had said.
Bank of Valletta had already lost US dollar services through Deutsche Bank two years ago.
Banks form relationships with other banks to ensure they can move capital quickly and easily between jurisdictions. A 2017 World Bank study found that these correspondent banking relationships have been gradually declining worldwide, as banks become less keen to take on risk and seek ways to cut compliance costs.