Audit report puts Savings Bank investment strategy under spotlight 

A long-running disagreement between the Gibraltar Government and Opposition over use of deposits in the Gibraltar Savings Bank to fund development projects in Gibraltar came into sharp focus again this week following findings set out in the Principal Auditor’s report for 2018/19. 

The Government insists the Savings Bank is acting as a development bank investing in projects in Gibraltar’s national interest. 

But the GSD has long questioned that policy, describing it as an opaque mechanism to fund government needs that is outside parliamentary scrutiny. 

This week, the Opposition centred on a 2024 audit of the Savings Bank included by former Principal Auditor Anthony Sacramento in his 2018/19 report and which had not been made public until now. 

The audit provides details of £50.5m of loan notes issued to the bank to finance a company which, the GSD said, was unknown until now. 

“Given that Sir Joe Bossano refuses to gazette the full audit report and accounts of the Gibraltar Savings Bank (“GSB”) since 2019, this year the Principal Auditor has again included the accounts for 31 March 2024 in his annual report in the public interest,” said Roy Clinton, the GSD’s Shadow Minster for Public Finance. 

“On pages 50 and 52 the Principal Auditor describes a series of mirror transactions in order to provide finance to an entity called Community Credit Union Co-Operative Limited.” 

“This is a Gibraltar incorporated company which was incorporated on 17 January 2023, limited by guarantee and owned by Gibraltar Community Initiatives Limited, which promotes the GSLP National Economic Plan.” 

“The complex transaction involves GSBA Limited - a subsidiary of the Savings Bank - issuing loan notes to the Savings Bank.” 

“GSBA then purchases the same value loan notes from its subsidiary Gibraltar National Mint Limited who in turn purchase the same value Loan Notes from Community Credit Union Co-Operative Limited.” 

“That Sir Joe Bossano himself called this overall structure through which the Government is organising similar transactions a financial jungle is an understatement.”  

“The existence of Community Credit Union Co-Operative Limited was, until revealed by the Principal Auditor in his report, unknown to the Opposition and questions will be asked as to what it is doing with £50.5m of money ultimately provided by Gibraltar Savings Bank depositors.” 

“As this is savers monies they are entitled to know what is going on.” 

Replying to Mr Clinton, the Government said the GSD’s position was “selfish and irresponsible”. 

It said the Savings Bank monies were invested in keeping with the Savings Bank Act and laws which the GSD had supported in Parliament. 

Sir Joe Bossano, the Minister responsible for the Savings Bank and currently the acting Chief Minister, said he had debated these issues with Mr Clinton “almost every month for the last 10 years”.  

“The depositors in the Savings Bank are aware that my policy is to invest their money in national projects in keeping with the law we amended, with Mr Clinton's support, for that purpose,” he said. 

"We specifically amended section 13 of the Savings Bank Act in 2016 for this purpose so that it expressly states that in directing investments of the deposits in the Savings Bank, preference is given to investments that will maximise the social and economic development of the community.” 

“That is what this investment of £50m exactly does in keeping with the law Mr Clinton voted in favour of.” 

“There is therefore nothing over which to raise the alarm.”    

“In fact, every time Mr Clinton suggests something is wrong with the Savings Bank we receive even more deposits.”  

“This money is properly invested, is producing returns in excess of the sums the Savings Bank is due to pay to depositors and is less than the Savings Bank Reserve.”  

"Not only is there nothing to raise the alarm over, this is an investment which shows we are right to pursue our policy of investing in national projects and securing both infrastructure investment and returns for savers, instead of simply investing outside of Gibraltar.”  

“It's time Mr Clinton changed his views from thinking our savers' money is safer outside of Gibraltar than invested right here.”