The take-up of nearly €30 million worth of shares through a pre-placement by APS Bank is an auspicious sign for the remainder of the €45 million Rights Issue.

A Rights Issue raises capital primarily from existing shareholders, but the Archdiocese of Malta and the Diocese of Gozo – the bank’s majority shareholders – have publicly declared that they wish to dilute their present shareholding and will not be taking up the opportunity to buy all their rights.

This means that just under €30 million was successfully sold in the pre-placement, leaving the remaining €15 million to be sold to existing shareholders and new investors – with the former being given preference.

The bank has already analysed the pre-placement take-up and confirmed that none of the new shareholders will hold more than five per cent of the total, which ensures broad diversification in the bank’s shareholder base.

This is by no means the first time that APS Bank has raised money from the capital markets, although the context has obviously evolved since its first Rights Issue in 2019. That had been a private issue among the bank’s original shareholders, raising €13 million.

This was followed in 2020 by a public bond issue, which was aimed at raising Tier 2 funding – which is mostly done to meet regulatory thresholds. The next evolution was for the bank to open up its shareholding, which it did through a €65 million IPO that brought it 3,300 shareholders, followed by a €50 million bond issue in 2023.

This Rights Issue will primarily be aimed at raising Tier 1 capital, Chief Financial Officer Ronald Mizzi explained.

“This is the strongest form of capital that a bank can have, which means we will be in a better position to grow, whether by lending more, backed up by the capital base, or by providing a wider suite of products and services to our customers, which are growing in number and in scope,” he said.

The Rights Issue was originally planned for 2024 as communicated by the bank during the Market Briefing meetings with shareholders and market players. The bank, however, opted to shift the timing following its interest in the acquisition of HSBC Bank Malta. Since the Rights Issue would have also raised capital to support the acquisition, it was moved to June 2025 – but APS Bank withdrew from the process earlier this year.

“The bank, however, still wants to grow, both organically and inorganically, hence the decision to go ahead with the €45 million Rights Issue,” he said.

What would investors be looking for when they decide where to put their money? The performance of the bank is one clear factor, and the timing could not have been better: the bank has been performing very well historically and is currently reporting higher profits compared to a more subdued performance in 2024, reporting regular and increasing bottom line results. Its share of the market exceeds 20 per cent – which goes up to 25 per cent for home loans. In fact, it is currently the second-largest lender in Malta, after Bank of Valletta, and recently reported €4.3 billion in assets, making it one of the important players in this sector.

It also boasts other positive metrics: it has a non-performing loan ratio of just 1.4 per cent – the lowest in the local banking sector – with a default rate on home loans of less than 0.5 per cent. As the bank is successfully lowering its cost of funds on stable asset returns, it is also on target to report a net interest margin above two per cent, ensuring sustained profits and returns, Mizzi explained.

The bank will release its third-quarter results tomorrow and is expected to report results that are stronger than those of the first two quarters of 2025.

“We expect to close the year in a much stronger position than our first half, thanks to the continued demand for our products and services, higher revenues, and more cost control,” Mizzi added.

“Good operating performance, top-line revenues, low rate of non-performing loans, stable cost growth: this is what forms the basis for improved and sustained better returns going forward.”

Of course, APS Bank’s strategy aims to broaden and improve the products suite it offers to customers – from the onboarding journey to more personalised banking and innovative delivery solutions. But it is also keeping an eye on the possibility that the planned occupational pensions will materialise.

“The bank is already very active in both Personal and Occupational Pension Plans. We are well positioned to lead in this area, having set up schemes with several organisations in Malta, including one for our own employees. We are ready to move forward in anticipation of the government’s announcements,” he said.

Another issue that will be on the minds of potential investors is the actual return on the value of the shares and the dividends. Although the share price is lower than the IPO price, this means that there is potential to grow – especially given the rebound in its operations over the past quarters.

APS Bank has also been paying a minimum of one-third of its post-tax profits as dividends – and since it went public, it has been ambitiously aiming for a 50 per cent payout, with the dividend paid out earlier this year reaching this target.

“This is a very important consideration for shareholders as they are looking for a consistent dividend payout,” he said.

All this positive news could lead to the double-edged sword of officially becoming ‘systemically important’ – there are currently three banks supervised by the ECB because of their size, and APS Bank is now clearly a contender for entry into the Single Supervisory Mechanism.

Mizzi noted that the Central Bank of Malta already recognises APS Bank as being systemically important, and that this is also reflected in its relationship with the different regulators.

“One thing I can say: the bank has been preparing for this eventuality for at least five years. We have been strengthening our different functions, investing in the right areas of the bank and absorbing many of the costs that this change would involve. Our capital ratios are already aligned with those of SSM banks. From a governance perspective, we have a robust Board and an Executive team, made up of individuals with many years of experience in banking and related areas, locally and abroad.”

“It will mean considerably more scrutiny, but we know it will probably happen, and we are prepared for it,” he said.

The Rights Issue marks an important step in the bank’s journey towards the future, encompassing everything from digitisation to an expansion of its suite of offerings. It is an exciting time for the bank, building on its reputation as a tried and tested partner in the context of the Maltese community.

Prospective investors should refer to the prospectus dated 22 October 2025 (“the Prospectus”), which may be downloaded from the website of APS Bank plc (“the Bank”) on 22 October 2025.

Copies of the Prospectus are also available from Authorised Financial Intermediaries listed in the Prospectus.

The rights issue offer period is between 27 October and 14 November 2025. In the event that the rights issue is not subscribed in full, a public offer of the excess shares via an intermediaries’ offer will commence on 21 November until 5 December 2025, or earlier as may be determined by the Bank.

This Interview has been issued and approved by the Bank, a public limited liability company with registration number C2192 and having its registered address at APS Centre, Tower Street, B’Kara BKR 4012, Malta. The Malta Financial Services Authority (“MFSA”) authorised the Prospectus and the shares as eligible to listing on the MSE pursuant to the Capital Markets Rules. The approval of the Prospectus by the MFSA should not be understood as an endorsement of the shares. The value of an investment, as well as the income therefrom, can go down as well as up and past performance is not necessarily indicative of future performance. Investors may lose some or all of the money invested. Prospective investors wishing to subscribe for the shares should do so on the basis of the Prospectus to fully understand the features of the investment and the potential risks and rewards associated with the shares. Prospective Investors are urged to consult their financial adviser as to the suitability or appropriateness of investing in the shares. This information shall not be deemed as investment, tax, or any other form of professional advice.

APS Bank plc is regulated by the Malta Financial Services Authority as a Credit Institution under the Banking Act 1994 and to carry out Investment Services activities under the Investment Services Act 1994.