Announcing a ‘strategic review’- HSBC Malta expected to be sold

HSBC Bank Malta, as a trading bank, is expected to be sold to a local financial institution, as reported by WhosWho.mt.

The process, which may involve the entirety or significant segments of the bank’s local operation, has reached a critical stage, sources say, although it has not yet been concluded and is in no way a done deal.

However, the deal has reached very advanced stages, and 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.

If the deal will be concluded, and involves the sale of the entire local operation, it will mean that HSBC, as a global player, will cease to operate in Malta. The bank is expected to be taken over by a reputable institution.

In the announcement, the bank said it “recognises the important role it plays in Malta’s economy and society.”

It said that it is making the announcement in line with its market obligations, and “to support the smooth functioning of the public market.”

The bank said it will make further announcements as and when required.

In comments made to WhosWho.mt, an HSBC Bank Malta representative said: “HSBC Group is reviewing its strategic options with respect to its majority shareholding in HSBC Malta.

“The review will consider a full range of options and no decisions have been made yet.

“It is business as usual for HSBC Malta and our focus will continue to be to serve our customers to the highest standards.”

The announcement follows years of speculation about HSBC’s commitment to Malta. Its physical footprint on the islands has decreased as it closed down local branches, even as it invested €30 million in new corporate headquarters in Qormi – “HSBC’s largest investment in a headquarters anywhere in Europe,” according to HSBC Bank Malta CEO Geoffrey Fichte.

“I could speak until I’m blue in the face, but you just need to look at what we’re doing in Malta”, he told Times of Malta last year, in response to persistent questions about HSBC’s long-term plans in the country, where it remains the second-largest bank, after Bank of Valletta, by a large margin.

In its financial report for 2023, HSBC Bank Malta reported having €6.1 billion in customer deposits, while net loans and advances stood at €3.1 billion.

In the report, it noted that “HSBC Malta is Malta’s leading international bank. No international bank has our presence in Malta and no domestic bank has our international reach.”

Nonetheless, the announcement of the strategic review will undoubtedly fuel the flames of speculation about HSBC’s future in Malta, with such reviews often preceding major changes to the bank’s presence in a country.