Local business consortium in joint bid for HSBC Malta

A group of mostly local businesses, including the Azzopardi Group, Gasan Group and Virtu Holdings, as well as current Lombard Bank CEO Joe Said, have submitted a bid for HSBC, according to sources.

The group is believed to be composed of between 10 and 12 companies and private investors.

Although most of the involved parties in the group are local, it also includes several foreign private investors.

It is unclear whether Said is involved in the group on behalf of Lombard Bank or in some other capacity.

The group includes several of Malta’s best known business leaders.

Azzopardi Group, most synonymous with its very first company, Azzopardi Fisheries, operates several prominent outlets in the food retail and importation industry, including Miracle Foods, Spar and Valhmor.

Gasan Group is a household name with a presence across several industries, from cars to insurance and property.

Meanwhile, Virtu Holdings is best known for Virtu Ferries, a passenger ferry service between Malta and Sicily.

Azzopardi Group, Gasan Group, Virtu Ferries and Said were all contacted by Times of Malta, but the group remains tight-lipped over the deal.

A spokesperson for Virtu Ferries said they are “not aware” of the company’s involvement in the group, while Gasan Group and Azzopardi Group both declined to comment, with a spokesperson for the former saying that they “do not speculate on such activities”.

Meanwhile, Said abruptly ended the call when first contacted by phone and did not respond to a written request for comment.

First known bid by private investors

The consortium follows APS Bank and Hungarian bank OTP as the third known bidder for the bank.

But this is the first known bid submitted by private investors, rather than exclusively by an established bank.

Industry insiders told Times of Malta that the European Central Bank, which would need to sign off on the deal, is typically wary of bank takeovers by investors from outside the banking world.

Malta must find itself with a bank that has a ‘good reputation’

“There is a huge focus on banking stability at the European level,” one industry source said. “There have been cases in which investors tried to buy a bank, but the regulator stepped in.”

Another industry source argued that “ECB is already not particularly happy about MeDirect’s ownership”. MeDirect is owned by a private investment group.

But would regulators agree to OTP?

Several banking experts also questioned what regulators would make of OTP’s bid, revealed by Times of Malta on Wednesday.

Many agreed with Finance Minister Clyde Caruana, who raised the spectre of reputational damage, warning that Malta must find itself with a bank that has a “good reputation” at the end of the process.

In 2023, OTP was included in a list of international sponsors of war by Ukraine’s National Anti-Corruption Agency over its continued operation in Russia, prompting a diplomatic dispute. The bank was removed from the list a few months later.

OTP has strongly rejected the reasons behind its inclusion on the list. In a letter to Times of Malta, it said that it keeps a “clear and firm distance from politics and personal entanglements” and that it does not “maintain any relationship with political actors that deviates from accepted western standards”.

“Malta needs more banking competition but is OTP the alternative?” stockbroker Paul Bonello asked when contacted by Times of Malta.

“There are good reasons to object to such a purchaser, I am positive that ECB would find an objection.”

But other industry insiders who spoke on condition of anonymity say that any concerns are likely to emerge from the fact that the bank is Hungarian (“the bad boy of Europe,” one source said), rather than any particular wrongdoing by the bank itself.

“OTP is a fine bank,” one insider said. “Every bank has skeletons in its cupboard, including HSBC, so there’s nothing to suggest OTP is particularly different.”

Another industry insider agreed. “OTP is not a bad bank, but there are problems with the jurisdiction,” they said. “As a bank, there is nothing to suggest it has been found guilty of wrongdoing.”

“OTP had to walk a fine line over the Russian invasion,” they added. “On the one hand, they can’t break with their own government’s line, which was quite sympathetic to Russia, but they also had to deal with Europe’s response to the invasion.”

Church bank APS officially confirmed it had submitted a non-binding offer to acquire HSBC last November.