Prudence puts us in a good position to jump on the right opportunities

WhosWho.mt caught up with our Malta Managing Director, Albert Cilia, to pick his brains on the effect of COVID, Brexit and Moneyval on this important sector, and why he believes the company is in pole position to grow despite the challenges.

The Maltese financial services sector has grown over the last 15 years to make up around 12 per cent of the country’s GDP, employing over 10,000 people and serving as a real alternative to other financial centres such as London, Luxembourg and Dublin.

Trident Trust, a global provider of corporate, fund and trust services, is this year celebrating its 10th year of operation in Malta. Asked about the company’s origins, Mr Cilia explains that the company was set up in 1978 in London. “We have evolved and expanded significantly since then, with over 900 staff across 5 continents,” he says. “Today the Group provides different jurisdictional options depending on the clients’ needs.”

“We have over 25 offices in all the key markets, onshore and offshore, you would expect a company providing such services to be present in. Some are more sales and client relationship centres, like New York or Zurich, while others, like Malta, are operational centres.

Set up in 2011, our Malta office provides trustee services, corporate services and fund administration, and it is led by a board of directors, namely Mr Cilia, Marie Louise Zammit, Aaron Sammut and Mark Le Tissier.

“The Group leadership has been very good at implementing a cohesive Group strategy,” he says, “While giving local branches enough room to act entrepreneurially.”

Mr Cilia then explains how the Maltese office also fits into the global network as a centre of excellence, providing operational support to other offices. “We act as a support hub for numerous offices around the Group, principally providing accounting and fund administration services. The overall client relationship will remain with the office we are working with, but they will outsource some of the work to us. This enables us to exploit time differences for the benefit of our clients – we can be working while our colleagues in another office are sleeping soundly at home – and also to introduce efficiencies through consolidating certain streams of work within our team.”

The conversation then turns to the obvious: the COVID-19 pandemic and its effect on financial services. The EY Attractiveness Survey noted that the sector was not as badly hit as many others.

How has Trident Trust reacted to the pandemic?

Mr Cilia explains that the Group was very focused, practical and measured in how it handled the impact of COVID-19.

“Prudence and resilience are in the Group’s DNA, since a prudent and long-term approach always pays off,” explains Mr Cilia. “The core focus of our business has always been doing the basics really well and during COVID-19, we were more focused on our fundamentals than ever before. We knew that if we ensured the safety of our staff and provided continuity of service to our clients, we would be successful.”

“Because we had already invested significantly in our global technology infrastructure, we were well placed to make the move to working fully remotely. Despite the challenging situation, we have been able to grow and to take advantage of new opportunities, particularly taking on new clients who have been dissatisfied with the service they have received during the previous 12 months.”

But the COVID-19 pandemic is far from the only thing affecting business.

Financial jurisdictions like Malta face a gathering storm of conditions that may impact how the industry works.

“First,” Mr Cilia explains, “if there is a global or local recession, this will have an impact on everyone. Our industry is a supporting one; we help facilitate and administer the structures of entrepreneurs, asset managers and investors, so the challenges we face very much depend on the challenges our clients are facing.”

“Then,” he continues, “there is the increasingly complicated nature of global financial and tax regulations.”

Do you think that the whole industry may be facing its end?

Mr Cilia laughs and says candidly, “Look, I’ve been hearing that tax efficient structures are going to die for probably 22 of the 25 years I’ve been working in the industry. But the truth is that people and businesses establish investment and holding structures for a wide range of reasons, of which tax planning is only one and often not the most important. The sector is still doing very well even if the environment is becoming more complicated. Unlike ourselves, many of our global competitors have been bought by private equity funds in the last few years. Our strategy to remain independent is very different but the fact that so much third-party investment is coming into the sector is a big vote of confidence in it. Overall, our global industry is evolving and maturing, and its future is strong.”

Despite the challenges, the number of companies registered in Malta continues to grow and Trident Trust has gone from strength to strength as it became the go-to service provider for foreign companies and individuals looking at new global opportunities.

Mr Cilia believes the sector still has a lot of scope, especially locally, where, “let’s be honest, it’s very important”. He believes the Government should keep supporting the industry and look at developing other industries that can work well together.

Like blockchain?

Mr Cilia laughs, “Well, that was an opportunity we decided not to immediately take, and perhaps we were proven right.”

“Maritime and aviation are more in line with the Group’s thinking”, he explains. “We are looking into these sectors at the moment and we expect to be much more involved in them in the near future.”

Turning now to Brexit, we ask whether Trident Trust has had clients relocating from the UK to Malta to have better access to the EU market.

Mr Cilia says that Malta’s approach was different to other countries. “We weren’t aggressive like some other jurisdictions.”

He describes Malta’s approach as friendly, and with an eye towards future relations. “It was more like, ‘We’re here and if you want to come over and see what we can offer, you’re welcome.’”

“To answer your question, yes, we have had clients relocating, but not as many as some might have expected. But our focus is on long-term relationships, not short-term gains.”

Could this be a reaction due to the uncertainty surrounding Malta’s potential grey-listing following Moneyval evaluation?

“I don’t think so. I think the potential Brexit dividend has been exaggerated and the truth is it’s a very competitive sector,” Mr Cilia explains. “Companies do their own feasibility study when setting up in Malta. They weigh the pros and cons, and they surely appreciate that a potential grey-listing may be considered within the cons.”

“So yes,” he continues, “potential new clients do ask us about the situation, as do some existing ones. You have a duty to be honest with them and you need to stick to the facts. ‘Yes, the jurisdiction’s position has been under review and the Authorities together with all the stakeholders in the industry have been working hard to address concerns, and the recent news seem to have recognised such efforts. We are not out of the tunnel yet but we believe the efforts carried out in the last 12 months will pay dividends in the years to come”

“Ultimately,” he says, getting back to my question, “no, I cannot say opportunities were lost because of Moneyval.”

Turning back to Trident Trust, we ask about the challenges the Group has faced in its 10 years of operation locally.

“To understand our challenges, one must first understand our approach,” says Mr Cilia. “We always strive to maintain a good perception of the jurisdiction. That means ensuring that the quality of service being provided is “the best possible”, not just “good enough”. We need to do better than other larger or more established jurisdictions to stay relevant.”

“The main challenge has been recruitment due to the strong competition in that space and the rapid growth of our industry in Malta. Thankfully, the labour market has softened a bit in recent years as many foreigners moved to Malta and on the other side growth slightly slowed.”

What about opportunities?

“Apart from aviation and maritime, we will continue to develop Malta as a centre of excellence for corporate, trust and fund services.”

“Thanks to the Group’s well-managed structure, we can take advantage of opportunities created from competitors’ lack of such structure and to quickly jump on any good opportunities fitting into the Group’s strategy”, Mr Cilia says.

“Trident Trust will continue evolving as it did over its many years of operation, to meet its clients’ ever-changing needs and requirements.”

Right now, the company is heavily investing in tech and compliance. “Truth is,” Mr Cilia says, “companies and groups that don’t invest heavily in their infrastructure will suffer. The stronger players become even stronger whilst the smaller ones find it more and more challenging.”

He sums it up concisely: “If you don’t invest, you fall back.”