HSBC selects Greece's CrediaBank as its preferred bidder

Updated 1pm

HSBC Malta is poised to be sold to CrediaBank, formerly known as Attica Bank, after its parent company announced on Friday that the Greek bank is its preferred bidder.

Having agreed on a deal, discussions between HSBC and CrediaBank will now enter a new phase, as advisors on both sides iron out its finer details and await formal approval from regulators, before setting pen to paper.

In a company announcement on Friday, HSBC Malta said that it had been informed by HSBC Holdings that it has "entered into exclusive discussions with CrediaBank S.A. (formerly known as Attica Bank) with regard to its majority shareholding in the bank".

HSBC Holdings owns 70.03% of HSBC Bank Malta, with remaining shares being publicly owned through its listing on the Malta Stock Exchange. 

The bank said the deal is still subject to regulatory approval from MFSA and the European Central Bank, "a process that is expected to take several months from entry into any binding agreement".

CrediaBank also confirmed the talks in a statement published by the Athens Stock Exchange.

"No agreement has been reached at the time of publication of this announcement and there is no guarantee that the ongoing discussions will result in the execution of a definitive transaction agreement," it warned. 

Sources, however, told Times of Malta they do not foresee any major stumbling blocks to finalising the deal.

CrediaBank is understood to be planning to finance the acquisition through its own resources. 

Finance Minister Clyde Caruana and his Greek counterpart Kyriakos Pierrakakis both hailed the news as positive.

The announcement brings HSBC Holdings one step closer to exiting the Maltese market, continuing its broader strategy of exiting smaller markets and pivoting to Asia.

The holding company first announced its intention to sell last September, following years of rumours about it seeking an exit.

Last week, Times of Malta revealed that Attica Bank emerged as a strong favourite, with both the Greek and Maltese governments having approved the deal.

CrediaBank was known as Attica Bank until last month, when it changed its name as part of an extensive rebranding exercise.

The rebranding came just months after Attica Bank merged with its local rivals Pancreta Bank, which had previously taken over HSBC's operation in Greece.

Attica Bank history

CrediaBank was known as Attica Bank until a few weeks ago, when it rebranded. It is the fifth-largest bank in Greece and is strongly supported by the Bank of Greece and the Greek state, which owns a 36% stake in it through the country's sovereign wealth fund. 

The bank's majority shareholder, with 57% of its share capital, is Thrivest Holding Ltd, a holding company jointly owned by Greek shipping magnates Dimitris Bakos, Yiannis Kaimenakis and Alexandros Exarchou. 

Remaining shares are publicly held and the bank is listed on the Athens Stock Exchange. 

Its acquisition of HSBC Malta is seen as an attempt to strengthen the bank and enable it to compete with the four leading Greek banks, which currently control the vast majority of the Greek market.

Although the bank has frequently found itself in hot water over a series of poor loans and governance failures, particularly after a damning European Central Bank inspection in 2016, it has since sought to improve its fortunes by slashing several non-performing loans.

The bank received a credit rating upgrade in March, when Moody's upgraded its baseline credit assessment rating to B1. 

Thursday's announcement will come as a blow to several other bidders who had thrown their hats in the ring over the past year, some of whom dropped out after facing institutional resistance.

Local bank APS was the first to withdraw its interest, with local authorities pushing for an international bank to take HSBC's place.

However, several international banks that put their names forward had skeletons in their cupboard.

Armenian Bank Ardshinbank faced resistance over its owner's past business links to Russia. Meanwhile, Hungarian bank OTP, the only other EU bank to express a concrete interest, was seen as a reputation red flag due to its continued presence in Russia.

Other bids, including one by the Bank of Georgia, a bid by German fintech company RS2 and another by a local consortium of businesses, also fell by the wayside, paving the way for CrediaBank to be named the successful bidder.