HSBC Bank Malta has switched its majority shareholder, saying the change was required in order to comply with an EU directive.
HSBC Europe BV transferred its direct shareholding in the Maltese bank to HSBC Continental Europe (HBCE).
This means that HBCE now holds a direct shareholding of 70.0295% in the bank - equivalent to 252,320,580 voting rights.
The local bank assured customers in a statement that the transaction will not involve any change in the day-to-day business of the bank and its subsidiaries (the HSBC Malta Group).
Ultimate control of the HSBC Malta Group will not change and will remain vested in HSBC Holdings plc.
“This transaction, in essence, simply means that the HSBC Malta Group’s direct shareholding was transferred from HEBV to HBCE to align with EU regulatory requirements," HSBC Malta CEO Simon Vaughan Johnson said.
"Ultimate control of the HSBC Malta Group will not change and will remain vested in HSBC Holdings plc. Therefore, this transaction does not change the day-to-day business of the HSBC Malta Group, or the way we interact with or serve our customers."
The bank said the transaction was carried out to ensure compliance with a revised version of EU directive 2013/36 concerning banks with headquarters outside the EU, like HSBC Group.
The directive requires such banks to have an intermediate parent undertaking (IPU) within the EU.
HSBC has opted to designate HBCE, its principal French subsidiary, as its EU IPU.
Impact on Tigne Mall plc
The HSBC share transaction had a knock-on effect on another local company, Tigné Mall plc, which is 12.8% owned by HSBC Life Assurance (Malta) Limited.
As a result of taking over the 70% stake in HSBC Malta previously held by HSBC Europe BV, HBCE now indirectly holds an 8.9734% interest in Tigné Mall through its control of HSBC Holding plc.
The company informed its shareholders of the change in a separate statement.
Bank shuts down British branches
News of the HSBC share transfer comes just as international media reported the closure of 114 HSBC branches in Britain from April 2023.
This is the latest in a string of such announcements by retail banks in the country as they slash their networks to try and cut costs, Reuters reported.
The UK-listed HSBC has also shed its Canadian division, moving out of the Canadian market with a US$10.1 billion sale to Royal Bank of Canada.
HSBC has been making a concerted pivot to Asia in recent years, following pressure from its largest shareholder Ping An Insurance Group to cut costs and refocus its business eastward.
In 2020, the Financial Times reported that bank executives were instructed to find buyers for the bank's operations in smaller, less profitable markets such as Malta.
HSBC Malta had dismissed that report as "speculative" but declined to comment further.