HSBC Bank Malta is “not aware” of negotiations taking place relating to its purchase by local competitor APS Bank.

In a company announcement released on Wednesday (yesterday) evening, the bank said that it has now requested clarification about the matter from HSBC Holdings plc, its ultimate owner.

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.

Such strategic reviews often precede major changes to the bank’s presence in a country.

Now, responding to the news 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.”

Capital markets rules stipulate that any announcement that may have a bearing on company’s share price must be communicated through the official channels, by way of a company announcement on the Malta Stock Exchange.

No such formal announcement has yet been made by APS Bank, while HSBC Bank Malta is claiming that it has no information as of yet.

The price of HSBC Bank Malta shares plummeted upon Wednesday’s announcement of its parent firm’s strategic review of the local operation, dropping from €1.65 to €1.35 and shedding over €100 million from its market value.

Meanwhile, pressure on APS Bank to make a formal announcement of the news has been growing. 

Outspoken stockbroker and financial advisor Paul Bonello said the following HSBC Bank Malta's statement, "the matter is now squarely in the court of APS to confirm or deny," reminding the bank of its legal obligation to issue a clarification in line with EU Market Abuse Regulations. 

He referred to a quote from the European Markets and Securities Authority: “If and when a publication such as an article published in the press or an internet posting, which is not resulting from a Regulated Market Issuer’s initiative in relation to its disclosure obligations or a rumour in the market, relates explicitly to a piece of information that is inside information within the Issuer, then that Issuer is expected in terms of Article 17(7) to react and respond to the relative publication or rumour if that piece of information is sufficiently accurate to indicate that the confidentiality of this inside information is no longer ensured. A policy of staying silent or of no-comment by the Issuer would not be acceptable."

Mr Bonello also said that the Malta Financial Services Authority (MFSA), in its capacity of Listing Authority and competent authority, "should be well aware of its obligation to ensure this is done by the issuers that it is supposed to regulate."