APS Bank is planning to purchase HSBC Bank Malta, with talks currently at an “advanced stage”. Although this will spell the end of HSBC’s operations as a brand in Malta, HSBC Group may retain a small minority shareholding.

News of a local financial institution in advanced talks to acquire HSBC Malta was first revealed by WhosWho.mt.

The acquisition of HSBC Bank Malta’s operations will make APS Bank the second largest bank in Malta, just behind Bank of Valletta.

Sources close to the negotiations tell WhosWho.mt that although talks between APS Bank Malta and HSBC Group have been ongoing “for some years”, the conversation was intermittent until early 2024, when they picked up significant momentum.

"When HSBC Group took the decision to exit Malta, as they have been getting out of serveral other markets like Canada, Brazil and Turkey, they approached APS Bank."

They sought to allay concerns that may be raised by staff and retail and corporate clients, saying that there are not intended to be any layoffs and that the service provided to HSBC Bank Malta’s customers will improve with APS Bank’s involvement.

The sources emphasised that there is a long way to go to close to deal. Both banks are in the process of appointing merger and acquisition advisors to assist in what is shaping up to be the biggest development in Maltese financial markets in over a decade.

Should APS Bank obtain regulatory approval to acquire HSBC Group’s 70 per cent shareholding in HSBC Group Malta, it will then need to make a public offer for the remaining 30 per cent in free float on the Malta Stock Exchange.

The sources positioned the deal as a win for Malta’s banking landscape, introducing a “very engaged” second-largest bank that can compete effectively with BOV.

“There will be a renewed commitment to the community,” they said.

The complex regulatory process has now kicked off, with an announcement by HSBC Malta today posted on the Malta Stock Exchange that its parent company, the multinational HSBC Holdings plc, has informed its Board of Directors that it will be undertaking a “strategic review” of its indirect shareholding in the local bank.