‘High-rise buildings are very much on our minds’ – APS Bank CEO

APS Bank CEO Marcel Cassar has stated that the prevalence of high-rise buildings in Malta is “very much” on the bank’s mind, particularly given a lack of coherence in the policy being followed.

He reconfirmed that the bank has a policy against the financing of buildings with 11 storeys or higher, what the banks define as high-rise buildings.

Mr Cassar was responding to a question that was submitted during APS Bank’s market briefing on Thursday (today) where the bank’s Annual Report for 2023 was presented. He was asked whether the bank has introduced a policy not to lend money for high-rise buildings, and why APS Bank is not promoting this as part of its ESG commitments.

Some argue that high-rise buildings are beneficial when it comes to ESG, particularly since they take up less land space, enabling developers to build up, rather than use up new land.

The topic had been first brought up during a Times of Malta interview last year, in which Mr Cassar had said that the scale of certain developments, together with the potential public outrage surrounding them, are leading local banks to rethink the projects that they finance. He had revealed the bank’s policy to not finance high-rise development projects, particularly due to “a lack of an overarching planning vision for high-rises.”

This had come a few weeks after Malta Development Association (MDA) President and Stivala Group CEO Michael Stivala had stated that Malta required more construction if it wanted to sustain its economic growth.

“This responsible lending policy which we have as a bank is partly to do with the aesthetic of it, but also has to do with sustainability. If we have to speak about a sustainable economic model for the country, and about sustainable economic growth – something I speak about very frequently – then you need to look also at the sustainability of the stock of certain buildings and structures and the demand for them, and high rises are something that is very much on our minds.”

Back in 2014, Government had approved a policy where the development of high-rise buildings would only be allowed in a select number of areas and localities, namely the Tigné Peninsula, Qawra, Gżira, Marsa, and Paceville. This led to the aforementioned areas being urbanised at a rapid rate over the years, with various large-scale projects since being completed, in the works, or proposed.

Mr Cassar made reference to this policy, stating that while high-rise buildings were originally confined to the aforementioned locations, “we have seen high-rises and high-rise developments mushrooming in different parts of the island.”

The proliferation of high-rises spread across Malta has led to widespread criticism from environmental NGOs and the general public, with many expressing their discontent at the lack of control when it comes to construction.

He remarked that this is concerning because there isn’t coherence about a policy on high-rises. “If there is a lack of coherence in the policy, then a banker should be even more cautious and guarded when it comes to financing,” Mr Cassar explained.