Updated 11.15pm with HSBC statement

HSBC shares plunged more than 18 per cent in trading on the Malta Stock Exchange on Tuesday, as talk of the bank exiting Malta prompted shareholders to look for an exit. 

Shares closed trading at €1.35, an 18.2% drop having started the day at €1.60. At one point, shares dropped to a low of €1.30 before recovering slightly. In all, just under 80,000 shares were traded throughout the day. 

The negative swing meant more than €100 million was wiped off HSBC Malta's value following the day's trading. The bank's shares are now trading at their lowest levels since late March. 

HSBC Bank Malta announced on Wednesday morning that its parent company was reconsidering its shareholding in the company. Rumours about HSBC wanting to exit Malta as it pivots towards Asia have swirled for years, but the bank had previously dismissed such talk as idle speculation. 

While it was a difficult day for HSBC Malta on the stock exchange, it was an altogether more positive one for APS Bank shareholders.

APS is in takeover talks with HSBC, with sources familiar with negotiations saying they are at an "advanced stage". The bank, however, has yet to make any statement to the market. 

HSBC Malta said it was not aware of any takeover talks involving APS or any other third party, adding that it has now asked its majority shareholder [the UK-based HSBC Holdings] for clarification about the takeover rumours. 

APS shares surged by 11.5% to reach €0.58c per share on trading volume amounting to 66,385 shares. It is the bank's highest closing price since May.

HSBC is Malta's second-largest retail bank and has been a key player in Malta's banking scene since 1999, when it bought out the government-owned Mid-Med Bank. 

APS, whose majority shareholder is the Church, was established in 1910. 

While both banks have similarly sized loan books, HSBC has a significantly larger high-street presence.

That is reflected in the amount of customer deposits held by each bank: according to its 2023 accounts, HSBC Malta has just over €6.1 billion in customer deposits as opposed to the €3.1 billion held by APS.