APS Bank’s bid to take over HSBC Bank Malta is shaping up to be one of the most significant stories within the realm of acquisitions in Malta's business history.

On Wednesday (yesterday) night, HSBC Bank Malta released an incredible statement declaring its complete ignorance of talks or negotiations that could potentially see its majority shareholding transferred from the multinational HSBC Group to its local competitor, APS Bank, bringing an effective end to HSBC in Malta.

On Wednesday morning, HSBC Bank Malta announced that HSBC Holdings plc had informed it that it would be conducting a “strategic review” of its Maltese subsidiary, and releasing a statement to that effect.

Later, responding to the exclusive story broken by WhosWho.mt that APS Bank is in an “advanced” phase of negotiations with HSBC Holdings to buy out its Maltese operation, HSBC Bank Malta informed the market that “it is not aware of any such negotiations taking place.”

Such a statement, however, raises more questions than it answers:

1. Did HSBC Holdings plc keep its local management team and Board of Directors entirely in the dark about the advanced state of negotiations with APS Bank?

It is understood that the negotiations taking place were between APS Bank Malta and HSBC Holdings plc, headquartered in London. It is therefore understandable that the Board of Directors and executive team of HSBC Bank Malta were not involved in the early stages. After all, shareholders speak to shareholders, and when buying anything, you talk to the owner, not the asset.

Claims of total ignorance of any such negotiations are more difficult to digest when negotiations reach a very advanced stage.

We are not saying that HSBC Malta is not telling the truth, but it is somehow surreal that HSBC Holdings asked HSBC Malta to issue a statement and inform the market that it was conducting a strategic review of its shareholding in Malta, when senior officials privy to the negotiations made it clear to this newsroom that the deal has reached the final stages of negotiations for APS Bank to buy its local bank.

Did HSBC Holdings plc, throughout the extensive negotiations, never need to consult, clarify or obtain hands-on information, from its Malta-based senior team?

2. Did senior HSBC Group executives fly to Malta to speak to the Prime Minister about its exit without informing its Malta-based CEO and Board of Directors?

Sources familiar with the matter have confirmed to WhosWho.mt that senior representatives of HSBC Holding plc travelled to Malta last week for a meeting with Prime Minister Robert Abela. During the meeting, held on Friday, they informed Dr Abela of HSBC Group’s decision to exit the Maltese market.

With the second statement released on Wednesday night, HSBC Bank Malta is de facto saying that the CEO, management and Board of Directors of HSBC Malta were not aware that their shareholders were in Malta, meeting the Prime Minister, and formally advising him that they are packing their bags.

3. This begs the question: did HSBC Group tell HSBC Malta that it wants to conduct a strategic review of its shareholding in the Malta operations when it had already reached an agreement in principle with APS Bank on the value of the (very significant) transaction?

HSBC Bank Malta has been vociferous in its attempts to dispel doubts about its commitment to Malta. Earlier this year, CEO Geoffrey Fichte said: “I could speak until I’m blue in the face but you just need to look at what we’re doing in Malta.”

However, sources close to the negotiations tell WhosWho.mt that HSBC Group has long made the decision, at global level, to divest of its Maltese holding.

One give-away, say industry insiders, was HSBC Bank Malta’s shrinking loan book.

Since 2016, HSBC’s net loans and advances to customers decreased by 7.1 per cent – over the same period that Malta experienced an economic boom.

For context, over the same period, other major banks typically saw their loan book expand significantly. Lombard Bank’s grew by 121 per cent, while BOV’s grew by 41.8 per cent.

APS Bank’s public records only go back to 2019*, but in just four years, it almost doubled the loans and advances to customers as it executed its plan for growth from a relatively minor player to one of the major banks in Malta.

*Edit: It was brought to our attention that APS Bank's financial statements going back to 2000 are public. Its net advances and loans to customers in 2016 stood at €806 million. Therefore, between 2016 and 2023, the bank increased its loan book by a remarkable 360 per cent - a rate of growth far outpacing any of its competitors.

4. So, did HSBC Bank Malta simply forward news of a strategic review without asking its parent company anything about it?

HSBC Bank Malta is essentially saying that upon receiving a major corporate update with deep implications for its future, by its shareholders, it simply forwarded the news to the Malta Stock Exchange without asking its parent company where it stands.

Again, we’re not saying this didn’t happen.

We’re saying we’re surprised.