APS Bank chief on shifting ownership, digitalisation and why investor appetite remains strong
Two weeks ago, APS Bank launched a rights issue to raise €45 million in fresh equity, accelerating the dilution of its historic Church ownership and to further tilt control towards institutional and retail investors.
“This is not only about strengthening the bank’s capital base. We are sending a clear message that APS Bank is ready for a new era of growth and positioning,” says CEO MARCEL CASSAR, reflecting on a year that included the bank’s withdrawal from the HSBC Malta acquisition, a chapter he now describes as firmly closed.
APS’s call for fresh equity is consistent with the bank’s stated ambitions to scale up through both organic growth and acquisitions. Mr Cassar notes that APS is already on track for another year of expansion across funding, lending, assets under management and revenue.
“This third quarter is shaping up to be one of the strongest ever, with rebounding net interest income, revenues and profitability. And asset quality is at a multi-year high with a very low NPL ratio of 1.4%.”
The new equity, he says, will ensure the bank remains comfortably ahead of regulatory requirements while preserving flexibility for opportunities in Malta and abroad.
Currently, AROM Holdings Ltd, owned by the Archdiocese of Malta, controls 54.7 per cent of APS, while the Diocese of Gozo holds 12.5 per cent. Both stakes will fall further.
“Our largest shareholders have made it clear they intend to continue reducing their concentration, a process started years ago,” Cassar explains.
“But they remain fully supportive of the bank’s strategy and governance will remain aligned with best international practices, so we do not expect changes on that front.”
To manage the transition, APS is in talks with investors to place lapsed rights from the Church’s holdings.
“Two weeks ago, we indicated that the size of lapsed rights will be in excess of €30 million. Meetings with existing shareholders, bondholders, customers and financial intermediaries show strong interest — we could probably already place all of the lapsing rights. That level of investor confidence is very telling.”
HSBC bid exit
The rights issue follows a bruising year for the bank. Earlier in 2025, APS pulled out of the race to acquire HSBC Malta.
“Exiting this opportunity was painful because we had been working on it since 2022 and were very advanced in our due diligence,” Cassar says.
The episode was overshadowed by a wave of speculation questioning the bank’s financial strength.
“This was never beyond our capabilities or, as some suggested, us biting off more than we could chew, especially given that we had amassed a ‘war chest’ in excess of €800 million. Nor was it about the Church seeking greater economic power, when in fact it has been reducing its stake for years.”
Rumours included claims that APS would cut HSBC jobs, struggle with approvals, or stifle competition.
“This caused frustration because we took it all silently, only making announcements when appropriate, knowing all along that we had a comprehensive roadmap and a formidable team to see the transaction all the way through.”
For Cassar, the chapter is closed. “We came out of this stronger, convinced that today APS is no longer a secondary option in Malta’s crowded retail banking space but an increasingly dominant force.”
Growth pillars
APS is Malta’s second-largest lender and has been investing heavily in technology and customer experience.
“We are increasingly the everyday bank of choice in Malta and are now focused on our business plan for the next three years,” Cassar says.
That plan rests on three pillars: scale, digitalisation and diversification. APS is investing €19 million in systems, automation and customer channels, including mobile and web upgrades, digital onboarding, an investment portal, instant payments and cybersecurity.
“We were early in our adoption of AI across customer engagement, portfolio optimisation and risk management. Today, this proactivity means our digitalisation journey is well advanced and has us positioned as leaders.”
The second pillar is diversification into pensions, private clients, investment services and SME banking. “We are sharpening our attention on the bottom line, ensuring shareholder value is always top-of-mind. And we remain open to inorganic opportunities, both in Malta and overseas.”
Sustainability is also in the bank’s DNA, and Cassar lists its ample credentials, citing green deposits and home loans, eco-business lending and a track record of delivering on ESG commitments.
“Although the direct costs may outweigh immediate financial returns, the long-term benefits are real, in the form of greater operational efficiencies, enhanced brand value and better utilisation of capital resources.”
APS has distinguished itself with a bold stance on fees. In 2023, it became the first Maltese bank to scrap online SEPA charges entirely, including for business clients.
“It was a significant move towards transparency and customer-friendly banking, and, to the best of my knowledge, we are still the only bank not imposing charges on online SEPA payments in euros. We are also on track to soon launch outgoing instant payments. I should underline that instant payments, whether incoming or outgoing, are also free.”
The bank’s expansion comes against a delicate economic backdrop. Malta’s public debt is expected to surpass €12 billion by early 2026, with turbulence in the corporate bond market adding unease. Cassar is broadly optimistic but notes vulnerabilities.
“Unemployment is low, inflation is stable, and the deficit is under control. Debt remains at an acceptable 50 per cent of GDP. But debt servicing costs are rising, and growth is heavily driven by private consumption. This creates challenges in infrastructure, labour and inflation that can mirror themselves in the corporate bond market.”
For now, Cassar is more focused than ever on APS’s direction. Having steered the bank through a transformative revival, he is unambiguous about his leadership style.
“I’m very driven by my values and I cherish an approach that is future-looking, transformation-driven and customer-focused. More importantly, we’re an ambitious team and this is what will spell the bank’s future successes.”
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