HSBC's parent company is to carry out a "strategic review" of its indirect 70.03% shareholding in HSBC Bank Malta.
The announcement was made in a statement to the market issued on Wednesday morning.
“HSBC Bank Malta p.l.c. (‘the Bank’) announces that HSBC Holdings plc yesterday evening informed the Board of Directors that it will undertake a strategic review of its indirect 70.03% shareholding in the Bank,” it stated in a statement to the stock exchange.
“The Bank recognises the important role it plays in Malta’s economy and society and is making this announcement in line with its market obligations, and to support the smooth functioning of the public market. The Bank will make further announcements as and when required.”
Rumours of HSBC exiting the Maltese market have swirled for years, fuelled by the global bank's gradual pivot away from Europe and smaller markets towards Asia.
In January, the current head of HSBC Malta brushed aside rumours of the bank’s departure from the country, saying he was hired to lead it “for the long run”.
“I could speak until I’m blue in the face but you just need to look at what we’re doing in Malta”, HSBC Malta boss Geoffrey Fichte told Times of Malta in his first interview since becoming CEO.
In 2020, the Financial Times reported that the bank was considering whether to wind down its operations in several smaller markets, including Malta.
And in May last year, a Reuters report said that the bank was considering an exit from a dozen unnamed countries in Europe as it focused on growing its business in Asia.
Fichte, however, remained adamant that Malta had nothing to worry about and pointed to the bank’s €30 million investment in its new headquarters as proof of the company’s long-term commitment.
It was, he said, “HSBC’s largest investment in a headquarters anywhere in Europe and probably the largest investment of any company in Malta in its own headquarters.”
The bank last year announced a record pre-tax profit €133.9m and followed it up in the first half of this year with a pre-tax profit €78.6m, up by €19.3m from the same period in 2023, mainly driven by an increase in revenue due to higher interest rates.
Mid-Med Bank takeover
HSBC bank became the leading international financial institution in Malta in 1999, when it bought the government-owned Mid-Med Bank. It accounts for about half of domestic banking activity.
The bank originally had a toehold in Malta through the operations of its subsidiary Midland Bank which set up a branch here in 1995.
Four years later it acquired Mid-Med Bank for the equivalent of €191 million amid controversy that the government was selling its shares at too low a price. The government had defended its actions, pointing to the importance of Malta having an important international financial player based here as a means to attract international investment.