HSBC sale falters as key bidder RS2 pulls out
Bank that teamed up with RS2 is now continuing solo negotiations
HSBC’s sale is on the rocks, with leading bidders RS2 unexpectedly dropping out of the race in recent weeks as negotiations intensified, according to sources who spoke to Times of Malta.
In April, Times of Malta revealed that the German fintech company had submitted a bid for HSBC Continental Europe’s 70% stake in the bank, vowing to revive the Mid-Med Bank brand.
Sources told Times of Malta that the company had teamed up with an as-yet unnamed bank to help finance the deal, eventually submitting an offer well in excess of the €204m figure with which HSBC Continental Europe had purchased its 70% stake from HSBC London back in November 2022.
As negotiations progressed, HSBC upped its asking price, leading to RS2 backing out of the deal altogether, sources say.
However, its partner bank opted to proceed on its own, engaging in negotiations to try to secure a deal without RS2 in the picture.
Times of Malta has sent questions to RS2.
Local consortium, two Eastern European banks still in race
Other bidders remain in the race, although each of them is believed to be facing their own difficulties.
A local business consortium has submitted a bid, despite several of its initial members having pulled out of the group several weeks ago. The consortium’s bid is believed to be well below the €200m mark, raising questions over its financial strength.
Sources say HSBC is also concerned about the consortium’s technological capabilities, with the bank keen to avoid IT changeover chaos of the sort that plagued BNF during a recent system upgrade.
Two other non-EU banks from Eastern Europe are also believed to have submitted separate bids, both of them also well below the €200m mark.
Furthermore, the higher of the two Eastern European bidders has also been flagged for having reputational issues.
Meanwhile, Hungarian bank OTP, at one time a frontrunner in the race, is believed to have opted against formally submitting a bid. Local bank APS, the first bank to have officially stated its interest in a deal, pulled out of the race in April. Both OTP and APS are believed to have perceived a lack of support from the authorities when pursuing the deal.
This scenario means that an imminent closure of the deal, initially slated for late spring, is now unlikely.
It is unclear whether the prolonged delays will have an impact on Malta’s economic stability. In April, Finance Minister Clyde Caruana had warned that the HSBC takeover “cannot take forever,” with the European Central Bank also having flagged its concerns with its local counterparts.