Times of Malta 13 October 1974 THE NATIONAL BANK AN UNNECESSARY TRAGEDY Sir, - I would like to refer to last weeks

s letter form Baron G. E. Testaferrata Abela. Contrary to what he states, although the National Bank of Malta group was consistently making profits over the past years, in keeping with past prudent practice the dividend for 1973 was not expected to be any higher than the previous level. All excess profits after tax would have gone to increase the Banks reserves and the interest of shareholders and depositors. Not only had the ex-Directors of the National Bank Group forecast a large profit before the crisis but a profit of 800,000 was made according to the auditors Deloitte and Co. these profits, together with all capital and reserves, were made to vanish under specific instructions from the Council of Administration who deemed it fit to divest the shareholders through wholesale write-downs of 6million. I am informed that the Directors, in spite of repeated requests, have as yet not even been given the facility of reviewing the write-downs. The fact that the Banks were formerly not allowed to lend abroad at high interest rates while the Bank of Valletta is now being allowed to do so is bound to improve the Banks profitability but nevertheless this has reduced the facilities available to Maltese industrial and touristic enterprises which the Maltese Banks had previously provided to a great extent whilst always keeping above the liquidity ration required by the Central Bank. If the Bank will also now be making large profits it will only prove the soundness of the Banks before the Governments intervention. It is known that certain large accounts against which unnecessary provisions had been made, have already in fact been fully recovered. This clearly illustrates how easily the all-Maltese Banks could have staved off a temporary crisis had Government wished to support them; instead the Government took the Banks over, doing so with no compensation to the shareholders. Yours truly, Shareholder Valetta