The Catholic Church plans to continue “retreating” from Malta’s banking industry by diluting its shareholding further, according to the Curia’s administrative secretary.
Michael Pace Ross said there is an agreement between both dioceses in Malta and Gozo to dilute the church’s banking presence.
The church is the majority shareholder of APS Bank, which has been involved in talks over the potential acquisition of HSBC Malta.
“We have started retreating in 2022 and we want to dilute our shareholding further. This is beneficial both from a pastoral and a financial point of view,” said Pace Ross when asked about the church’s financial strategy for the future.
He said he could not elaborate further at this stage.
In 2022, APS Bank raised close to €100 million through an initial public offering that saw the bank sell 110 million new shares. The IPO meant the Maltese archdiocese’s shareholding in the bank was diluted to roughly 55%, down from the 79% it owned before.
Last month, Times of Malta reported that APS Bank was in advanced negotiations to take over HSBC’s Malta operations.
This came after HSBC announced it would be carrying out a “strategic review” of its operations, its clearest hint yet at a possible exit from the country.
HSBC’s decision to leave Malta is believed to be driven by its global push to focus on corporate banking in Asia, at the cost of cutting down on retail banking within Europe.
Sources said that HSBC’s global shareholders and APS Bank were in potential takeover talks as early as January 2023 – for the latter to take over. However, negotiations came to an abrupt halt in July when APS stepped back from the deal, according to sources.
While the deal was off the table for seven months, the international banking giant is believed to have shopped around for an international buyer to take over its Malta operations but failed to secure a name.
There was no further contact between HSBC and APS for some seven months, with the deal believed to be off the table, until talks tentatively resumed in late February 2024.
Talks intensified in recent months, with both parties now agreeing on a number of key elements of the deal, including the price, the possibility of HSBC retaining a small share in the new bank and offering assistance with the transition, according to sources.
But the government is believed to be unsure of the deal with APS, with Finance Minister Clyde Caruana, especially, insisting on HSBC finding an international buyer to take over its Malta operations.
So far, APS has not officially denied or confirmed its intention to buy out HSBC Malta’s operations, simply saying that “all its actions and dealings are invariably guided by the highest standards of good governance and due regard of its various regulatory obligations, including the respect for confidentiality”.
The church has also remained quiet on the matter.