AgriBank – one to avoid

You might sensibly not want to put any of your savings with a Maltese bank – after the Cyprus crisis both Malta and Luxembourg look potentially exposed as having very large financial sectors.

But if you do, then you would expect your savings to be covered by the Maltese Regulator’s compensation scheme, wouldn’t you? Because all Euro-zone countries have the same compensation rules, don’t they?

agribank ad

Well it seems not. AgriBank has recently been offering what looks like a good rate, 3.35% on a three year deposit. But the Guardian got this quote from their Maltese regulators, the MFSA, when it tried to clarify the compensation situation:

Please note that on 16 May 2012, the MFSA had issued a policy under which it prohibited (or limited) any newly licensed credit institutions from creating undue liabilities on the local deposit compensation scheme … The position of AgriBank is therefore that while it is a member of the DCS, its funding shall be in the form which are [sic] not considered as eligible deposits under the DCS …

So although AgriBank does seem to be regulated by the MFSA, deposits with it don’t fall into any compensation scheme. To be fair, this is exactly what AgriBank says on its website, but it still looks like a huge anomaly for the Eurozone and means UK investors really do have to look closely at Eurozone banks offering good rates.

And in the meanwhile, AgriBank would seem to be one to avoid…


  1. It wouldn’t have been on my list anyway, but interesting point!

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