(Commonwealth_Europe) A group of local business leaders and private investors has reportedly submitted a bid to acquire HSBC, including prominent entities like the Azzopardi Group, Gasan Group, and Virtu Holdings, along with current Lombard Bank CEO Joe Said. Sources suggest that the group comprises between 10 and 12 different companies and private investors, with a mix of both local and foreign participants involved.
The exact nature of Joe Said’s involvement remains unclear. It is unknown whether he is representing Lombard Bank or participating in the consortium in another personal or professional capacity. Despite the high profile of many of the individuals and organizations involved, details about the bid and the group’s objectives remain scarce. Notably, all parties approached by Times of Malta, including Azzopardi Group, Gasan Group, Virtu Holdings, and Joe Said, have either declined to comment or refrained from confirming their involvement. For instance, Virtu Ferries, a subsidiary of Virtu Holdings, has denied knowledge of the bid, while Azzopardi Group and Gasan Group have opted not to speculate on the matter.
For context, the Azzopardi Group is best known for its founding company, Azzopardi Fisheries. The group has since expanded to include several major brands in the food retail and import sectors, such as Miracle Foods, Spar, and Valhmor. Gasan Group, a household name in Malta, has a strong presence across various industries, including automotive, insurance, and property development. Virtu Holdings, known for its ferry services connecting Malta and Sicily through Virtu Ferries, is another prominent participant in the local business community.
Despite the secrecy surrounding the bid, this move is significant because it marks the first known submission from private investors, rather than traditional banking institutions. Before this, APS Bank and Hungarian bank OTP were the other known bidders, both representing established financial entities. However, sources close to the matter suggest that the European Central Bank (ECB) would likely have reservations about approving such a transaction, especially when it involves investors from outside the banking sector. Bank takeovers in Europe are subject to stringent scrutiny, and the ECB places a high emphasis on maintaining banking stability.
The involvement of foreign private investors raises further concerns among industry insiders, who note that the ECB is generally cautious when it comes to approving acquisitions from outside the banking world. Additionally, the reputation of the acquiring party is crucial. For example, one source noted that the ECB is already uncomfortable with MeDirect Bank’s ownership, which is controlled by a private investment group. Similarly, the possibility of the OTP’s involvement has raised concerns. OTP’s ties to Russia, which led to the bank being briefly included in a list of international sponsors of war by Ukraine’s National Anti-Corruption Agency, have sparked diplomatic tensions. Despite OTP’s removal from the list a few months later, the incident has sparked questions about its reputation.
Despite OTP’s assertion that it keeps a neutral stance on political issues and distances itself from any controversial political entanglements, some argue that Malta could face reputational risks if OTP were to acquire HSBC. Local stockbroker Paul Bonello raised the issue of whether OTP could truly offer the competition that Malta needs in the banking sector, especially given the negative perceptions surrounding the Hungarian bank’s geopolitical associations. Some insiders believe that, while OTP itself is a well-established and financially stable institution, its association with Hungary’s government, particularly its perceived sympathy for Russia, could complicate regulatory approval from the ECB.
On the other hand, certain individuals within the industry maintain that OTP is not inherently a bad bank, highlighting that many financial institutions, including HSBC, have their histories of internal challenges and regulatory scrutiny. These individuals argue that concerns about OTP’s ownership of the bank may be less about the bank’s conduct and more about its nationality, with some referring to Hungary as the “bad boy of Europe.”
Another factor complicating matters for foreign bidders like OTP is Malta’s intense focus on the reputation of its banking sector. Finance Minister Clyde Caruana has emphasized that Malta’s banking landscape must prioritize stability and trustworthiness, warning that any transaction must ultimately leave the country with a financially sound and reputable institution. The government and regulators are keen to ensure that any acquisition of a significant banking institution like HSBC does not destabilize Malta’s financial system or compromise its international standing.
APS Bank, which the Catholic Church controls, has already confirmed that it submitted a non-binding offer for HSBC last November. The announcement makes it the third known bidder for the bank, following OTP’s bid and the local private investment group led by Azzopardi, Gasan, and Virtu.
As the bidding process continues to unfold, industry observers will be closely watching how regulators, including the ECB, respond to these diverse bids. Concerns over reputation and the stability of Malta’s banking sector are likely to remain at the forefront of the discussions. Meanwhile, the business community remains silent, with the involved parties opting to avoid speculation and public comment, leaving the fate of HSBC’s potential acquisition uncertain.
