Leading through change: Lessons from APS Bank’s potential acquisition of HSBC Malta

The recent news surrounding APS Bank’s potential acquisition of HSBC Bank Malta has not only stirred the local financial landscape but also offers significant insights into leadership during times of upcoming transformation. If the deal goes through, it will be one of the most consequential in Malta’s business history.

After APS Bank was outed by WhosWho.mt as the local financial institution in talks to acquire 70.03 per cent of HSBC Bank Malta from its parent company, HSBC Holdings plc, APS released a statement where it did not deny the claims, and simply stated that its actions are guided by “the highest standards of good governance” and “due regard for confidentiality”.

Assuming that talks are underway then, the potential acquisition by APS Bank presents valuable lessons for senior leadership teams across industries on how to lead through change effectively.

The dynamics of this takeover bring to light several key leadership themes — from managing uncertainty to executing a strategic vision, as well as integrating corporate cultures and ensuring talent retention.

Here are some critical leadership takeaways from APS Bank’s strategic move:

1. Driving strategic growth

At the heart of this potential acquisition is a bold, visionary move by APS Bank’s leadership to position itself as a leading player in Malta’s banking sector. Strategic acquisitions like this require forward-thinking leaders who can recognise opportunities for growth, even in challenging circumstances, and the circumstances are most certainly challenging when considering the size of APS versus the size of HSBC Bank Malta.

Just looking at the share price of both banks as markets opened on 13th September (today), HSBC Malta’s made a slight rebound and reached €1.49, while APS Bank increased to €0.595. Based on HSBC Malta’s trading price on Friday morning, the market value of HSBC Holding’s 70.03 per cent shareholding is around €375.96 million. Meanwhile, APS Bank’s current market valuation, based on its trading price as at Friday morning, is approximately €224.79 million. Indeed, several local market analysts have questioned how APS Bank has the firepower to attempt to make such a bold acquisition.

Back to lessons in leadership, for APS Bank, acquiring HSBC Malta would significantly expand its market share and solidify its status as a major financial institution. CEOs and senior leaders across industries can learn from this by embracing the mindset that sustainable growth often involves calculated risks and a willingness to invest in transformative initiatives.

2. Crisis management and navigating uncertainty

Leading an organisation through a period of uncertainty is one of the most challenging tasks for any leadership team. For HSBC Malta, the announcement of a strategic review by its parent company, HSBC Holdings plc, introduced an element of unpredictability for both employees and customers. While these reviews are often precursors to significant changes, including exits or acquisitions, the key to effective leadership lies in how management navigates this uncertain period.

APS Bank’s leadership, on the other hand, faces a different challenge — guiding their organisation through the complexities of a major acquisition. This requires not only strong crisis management skills but also clear communication and steady hands to reassure internal and external stakeholders. The lessons here are clear: transparent communication, swift decision-making, and a focused approach are essential for steering through uncertain waters. And, many have argued that APS Bank has failed to keep the market adequately informed, being that it only provided and update after its involvement was brought to light by WhosWho.mt, and it consequently issued a vague statement.

3. Cultural integration: Aligning people and purpose

One of the most daunting challenges in any acquisition is ensuring a smooth cultural integration. APS Bank’s leadership, should the deal eventually go through, will need to ensure that the two entities — each with its own set of values, corporate culture, and operational style — can merge without creating friction. Aligning people and purpose is crucial to ensuring that both employees and customers experience minimal disruption during and after the transition.

In this context, leadership teams must demonstrate emotional intelligence, adaptability, and an understanding of the human side of mergers. The cultural dynamics of both organisations need to be carefully considered, and senior leadership should focus on fostering unity, building trust, and maintaining morale.

4. Leadership transparency and managing reputation

For HSBC Malta’s leadership, managing the reputational aspect of this potential exit is critical. The market was surprised by HSBC Bank Malta’s statement expressing unawareness of any negotiations taking place for the sale of its operations. For a multinational bank that has long been a pillar of Malta’s economy, this represents a reputational challenge that senior leaders must address head-on.

A key leadership lesson here is the importance of transparency, especially during periods of corporate upheaval. Clear communication with employees, customers, and stakeholders helps maintain trust, even when the future is uncertain. Leaders must strike a balance between protecting confidential negotiations and keeping their teams informed to avoid alienating staff and clients.

5. Talent retention and workforce stability

Acquisitions often come with concerns about job security and changes to organisational structures. For both APS Bank and HSBC Malta, leadership must focus on retaining key talent and maintaining workforce stability during this time. The fear of redundancy or shifts in corporate culture can lead to disengagement and loss of critical employees.

APS Bank’s senior leaders will need to reassure staff, not only about job security but also about the long-term vision and opportunities that may come with the acquisition. For HSBC Malta’s leadership, keeping their teams motivated while facing uncertainty requires strong internal communication and engagement strategies. This speaks to the larger leadership challenge of maintaining employee trust and loyalty during a period of significant transition.

6. Strategic leadership in the financial sector

This acquisition brings into focus the critical role of strategic leadership in the highly regulated financial industry. For APS Bank, successfully navigating regulatory approvals, managing operational integration, and aligning the two entities’ financial structures will require deft leadership at both the boardroom and executive levels.

At this stage, with local media having broken the story about its talks and dealings with HSBC Holdings, many have speculated as to why the bank gave no update to the market, as it is legally required to do so, and only provided its vague statement after its hand was forced.