Updated 5.45pm.

Bank of Valletta confirmed on Tuesday that it had been approached by third parties wishing to bid to take over the operations of HSBC Malta. But Finance Minister Clyde Caruana immediately indicated his opposition, saying he wanted to see more competition in the banking sector, not less.

Drawing an analogy with football, he said that competition did not improve when one team also had players in the other team.

Bank of Valletta in a company announcement said that as one of Malta’s leading financial institutions, it was unsurprising that it had been approached by third-parties expressing interest in prospective financial bids, in this case HSBC Malta.

The bank said it would continue to monitor developments closely and it remained committed to ensuring transparency and full compliance with its regulatory obligations, including those related to competition, financial stability and avoidance of conflict of interest, whilst maintaining its duty of care to its shareholders.

"Any decision which the bank might consider in the future will only be formulated in close coordination and cooperation with all relevant regulatory authorities and following the full extent of its due governance processes."

HSBC's parent company announced in September that it was to carry out a "strategic review" of its indirect 70.03% shareholding in HSBC Bank Malta.

APS Bank was the first to express an interest in acquiring HSBC. However, on  April 17 it said it was "regrettably withdrawing" from the bidding process, citing confidential information external to the due diligence exercise as having caused it to reconsider its participation in the sale process.

Times of Malta reported last week that HSBC will select its preferred bidder by the end of spring.

Hungarian bank OTP, which had reportedly expressed an interest, appeared to be out of the race, according to sources. Six other groups were believed to also have expressed an interest but the field narrowed as discussions progressed.

Informed sources said that BOV's involvement had been requested by a local consortium after several of its initial members pulled out.

German fintech firm RS2 and two, as yet unnamed, non-EU banks have also been in discussions with HSBC over the past months.

In his reaction when questioned, Finance Minister Clyde Caruana said he learnt of the offer made to BOV from its company announcement. He insisted that he wanted to see more, not less competition in the banking sector.

When two football teams were in the field, competition did not increase when one team took players from the other, and the two should remain separate and distinct, he said. It made no difference if it was just a small shareholding.

Union holds talks with HSBC bidder RS2

Meanwhile, the Malta Union of Bank Employees (MUBE) said on Tuesday that it was seeking to engage with those bidders who have been receptive to its approach.

It said introductory talks with RS2 had been positive and more meetings are planned should the deal go ahead.  

It said it continues to be involved in ongoing discussions with both HSBC Bank Malta and representatives of the HSBC Group whilst keeping its line open with the local regulator MFSA.

The MUBE urged all interested parties to ensure that the selected bidder is one that pledges to apply high standards of governance and best practice.