The head of the Commonwealth Bank of Australia's structured finance division, Leanne Leong, has left the bank amid controversy about her division’s role in using the low-tax jurisdiction of Malta, media reports said.

The bank has declined to comment on Leong’s departure or the future of the Malta operation, reports said.

The division, which contributes more than $100 million a year in income, played a key role in setting up and managing the CBA's $5 billion operation in Malta.

Reports quoted sources saying that the Maltese operation, along with structured finance, would be wound down.

The move highlights how banks, even if they do not break any specific laws, are being affected by major countries’ determination to shut down so-called tax havens in a bid to prevent outflows of revenues. Malta – a member of the European Union and the euro – has consistently rejected the tag of “offshore tax haven”, but its tax regime is nevertheless attractive to a number of companies. Malta is also growing its profile as a tax-friendly location for investment funds.

Income tax, for example, is charged at progressive rates up to 35 per cent – a rate that nevertheless compares favourably with the UK’s new top rate of 50 per cent on the highest earners, for instance. The country also operates an imputation system for dividends, which means that tax that is paid by a firm is imputed as a credit against the tax due by the shareholders when a dividend is paid out. Companies are taxed at a flat rate of 35 per cent, but the imputation system can significantly mitigate the impact of the tax on shareholders. The amount of the tax refund is set at 6/7ths of the advanced corporation tax paid by the company.