Banca CIS on San Marino’s economic potential

World Finance speaks to Professor Massimo Merlino and Daniele Guidi from Banca CIS to discuss San Marino's economic potential

July 23, 2014

The Republic of San Marino is a small state inside Italy, yet is renowned for its banking sector. One bank that has firmly built its routes there is Banca CIS. World Finance speaks to Professor Massimo Merlino and Daniele Guidi from the company to discuss San Marino’s economic potential, and the opportunities open to investors.

World Finance: Well Massimo, if I might start with you, San Marino – what’s its economic potential globally?

Massimo Merlino: San Marino is a sovereign state, having its own autonomy from three centuries after Christ’s death, so it’s an unbelievably long story of the republic. It’s very very integrated with the world, it has a lot of relationships with more than 100 countries around the world, so it’s commercially and financially also integrated we must say.

[A]ll the small states are leading globalisation

Of course, we can do more; the potential of small states in globalisation is very high, as you know. Because all the small states are leading globalisation and also San Marino can offer to the world a lot of its own competencies and a lot of its own experiences. Normally we are not so known like very old financial platforms, like in Asia or in Europe, but we can of course have a very similar role in the future.

World Finance: What can you tell me about the region’s financial system from an international perspective?

Massimo Merlino: All the micro-states in Europe are moving to more integrating agreements with Europe, with the US, with international markets. And San Marino has proven to do very accurately all these steps, of integration internationally and agreement to be signed with the US and with Europe, and so now it’s ready to be completely open to the world.

The recent fiscal agreement with Italy has at least finished a long discussion with the Italian government. San Marino is on the White List of all OECD organisation countries, but was not with Italy, so now everything has been solved and San Marino is ready to go on the world stage. Of course we have a lot of things to learn in techniques, in competencies, and a lot of new human resources to be educated to international financing.

World Finance: And how is Banca CIS positioned in the region?

Massimo Merlino: Now it is a bank of about 8,000 clients, about 90 employees in the banks and collecting total assets of €1bn. So it’s a medium bank, and of course very active in retail but also in private, because it’s the result of a fusion of previous institutes operating in San Marino.

In the private segment we have the longest periods, from one of these institutions which were connected all together in this Banca CIS. And our private experience is particularly strong because we have a financial company, which is called Scudo Investimenti.

This company is managing 15 funds of San Marinese law and this fund has a lot of advantage from a fiscal point of view, because of San Marino’s lower regulation. And we can also, through Scudo, engineer new products and new funds for other banks according to their specifications.

World Finance: Well Daniele, over to you now: how is the banking system in San Marino structured?

Daniele Guidi: In the past there were 12 banks and about €14bn managed by our whole financial system. But the crisis beginning in 2008 and also the fiscal amnesty in Italy have reduced the potentiality for about 50 percent of deposits. Now we are only seven banks after a process of consolidation and merger acquisition.

The system is in this moment stronger. Also the Central Bank of San Marino’s Annual Report has recently certified the potentiality of the system. And just to give you an idea, the supervisory regulation required for our bank is a minimal level of service duration of 11 percent, so all the system is more than 11 percent. To make a comparison with Europe, Europe is at six, seven or eight percent.

But there are a lot of opportunities: in the last two years our government has improved a lot of laws for residential and fiscal opportunities for foreign investors

World Finance: Well what opportunities do you see for foreign banks and firms in San Marino?

Daniele Guidi: We know very well that San Marino is not acknowledged in this moment as a financial opportunity for foreign investors. But there are a lot of opportunities: in the last two years our government has improved a lot of laws for residential and fiscal opportunities for foreign investors in San Marino.

Just to give you another idea, San Marino is involved as a smaller state – a European small state – in an agreement with the European Union for association, when enables exchange of capital and people inside Europe. So when this process has been handled, there should be the possibility to invest through our country directly in Europe and also using our double taxation agreement network to have fiscal advantages for investors in Europe.

World Finance: Well finally, what’s Banca CIS’ strategy for future growth?

Daniele Guidi: To offer for our local customers a number of products and services under our technology; mobile phone and mobile opportunity.

Secondly, there is an opportunity reserved with this agreement with the European Union. We would like to develop corporate finance, because corporate finance should be very interesting for this kind of investor.

Thirdly, our know-how is also important in private banking and wealth management, and as a family office. We are opening new branches outside Italy, outside Europe in this sector, so we would like to develop private banking and wealth management opportunities in Europe.

World Finance: Daniele, Massimo, thank you.

Daniele Guidi: Thank you.

Massimo Merlino: Thank you.