Much discussion has been sparked in recent weeks about HSBC Bank Malta’s possible takeover of APS Bank, an institution owned by the Church. A group of clergymen and committed laypeople have circulated a petition asking the Maltese Episcopal Conference to put a stop to the process. The main argument is that the Catholic Church’s social teachings are at odds with this acquisition and this step might severely damage its reputation.
One of the primary arguments against this acquisition is the perception that it deepens the association between the Church and wealth, thus alienating the poor and marginalised, the very people it is meant to serve.
Critics argue that this potential acquisition contradicts the teachings of Pope Francis, who has consistently emphasised the Church’s mission to stand with the vulnerable and the underprivileged. An acquisition of this nature, particularly of a bank with a mixed reputation like HSBC, threatens to reinforce the notion of the Church as club for the wealthy.
In addition to this, the secretive nature of the ongoing negotiations has sparked concerns about transparency.
At a time when the Church is championing synodality, advocating for a more inclusive and consultative approach to decision-making, the closed-door nature of this potential deal seems to contradict these values. Despite the synodal process’s stated goal of hearing from the community, many feel they were excluded from a discussion that would determine the fate of a significant Church-run institution.
Moreover, the acquisition of HSBC Bank Malta, which has faced multiple scandals in recent years, brings its own set of problems. From allegations of money laundering to global tax avoidance, the bank’s track record is far from spotless. Integrating such a financial entity into APS would not only saddle the institution with these negative associations but could also risk damaging the Church’s standing in Malta, particularly at a time when public trust in large financial institutions remains fragile.
Furthermore, people within the financial sector have raised serious doubts about APS Bank’s ability to even undertake such a large acquisition. For instance, veteran stockbroker Paul Bonello expressed scepticism, suggesting that APS Bank likely lacks the
financial capacity to absorb a giant like HSBC. Bonello remarked that APS likely does not have the “firepower” necessary for such an acquisition, making the feasibility of the deal questionable at best.
This raises concerns that the Church might be embarking on a high-risk financial venture that could backfire, leaving the institution and its banking arm overextended.
Several popes have consistently inferred that the Church should not directly involve itself in economics or politics, reinforcing the principle that the Church’s primary role is to provide moral and spiritual guidance while leaving economic and political action to the laity. In his encyclical Popolorum Progressio, Pope Paul VI stated that “lay people must consider it their task to improve the temporal order. While the hierarchy has the role of teaching and authoritatively interpreting the moral laws and precepts that apply in this matter, the laity have the duty of using their own initiative and taking action.”
The potential acquisition of HSBC by APS… risks damaging the Church’s reputation and alienating its core mission- Claudio Farrugia
The Church should reconsider its stance vis-a-vis APS Bank. Instead of pursuing a risky and controversial acquisition, the Church could consider transforming APS into a cooperative bank. This would align the institution more closely with Catholic social teachings, focusing on mutual aid, community support and ethical banking practices.
Historically, the Catholic Church has been instrumental in the development of cooperative banks across Europe. In the late 19th and early 20th centuries, Church figures like theologian Wilhelm Emmanuel von Ketteler advocated for economic justice and workers’ rights, inspiring people like Friedrich Wilhelm Raiffeisen, a pioneer in cooperative banking. Raiffeisen’s model of mutual aid and collective responsibility created one of the earliest rural credit unions in Germany, a financial institution built to serve the common good rather than pursue profit.
Similarly, in Italy, the Church played a significant role in supporting Banca di Credito Cooperativo (BCC), a network of cooperative banks established with the help of local parishes. In rural areas, where conventional banks frequently fell short, these institutions sprang up to fill the need and encourage financial inclusion.
During its early years, the Church’s role was limited to providing material help and a moral compass as well as social and organisational resources. Cooperative banking was promoted by parish priests as a way for communities to put Catholic social teachings into practice, and they also played a key role in organising communities to participate in these organisations.
Cooperative banking in the Church has its origins in the social doctrine laid out by Pope Leo XIII in his 1891 encyclical Rerum Novarum. In this landmark encyclical, Pope Leo XIII reaffirmed the Church’s support for economic policies that benefit working people and the poor. This goal is well-aligned with cooperative banking, which promotes economic inclusion and solidarity.
The potential acquisition of HSBC by APS has generated widespread concern, from both financial and ethical standpoints. It risks damaging the Church’s reputation, alienating its core mission and overextending its resources.
Instead, the Church has a unique opportunity to lead by example, by considering transforming APS into a cooperative bank that upholds the values of solidarity, inclusivity and ethical financial practice.
Such a move would not only preserve the Church’s moral integrity but also offer a daring new vision for Malta’s banking sector, one that truly serves the common good.
Claudio Farrugia is an opinion writer and CEO of the Malta Cooperative Federation.