APS Bank has withdrawn from the race to acquire HSBC Malta, citing confidential information received outside the due diligence process.

In a market announcement on Wednesday, APS Bank said it had informed HSBC Holdings of its decision to exit the bidding process for HSBC Bank Malta. The move comes just three weeks after APS confirmed it was entering the due diligence phase to explore the potential acquisition.

APS described the proposed deal as a strategic opportunity with the potential to benefit a wide array of stakeholders. “The investor community, local and international, had warmly responded to invitations from the Bank and its advisers,” it said, noting the interest shown in the transaction.

However, the bank said it had received confidential information external to the formal due diligence process, which ultimately led it to reconsider its position. It did not elaborate on the nature of this information but said the decision to withdraw was made in the best interest of its shareholders, employees, and customers.

The announcement is likely to shift attention back to HSBC Malta and its parent company, which is seeking to offload its Maltese operation as part of a global strategy to streamline its footprint. With APS now out of the picture, it remains unclear whether any serious local or international bidders remain.

In its statement, APS thanked key shareholders AROM Holdings Ltd and the Diocese of Gozo, as well as advisers Alvarez & Marsal, Ganado Advocates, Rizzo Farrugia & Co, and Allen Overy Shearman Sterling for their support throughout the process.

Despite stepping back from this high-profile opportunity, APS signalled it would continue to pursue growth and remain open to future strategic deals, “always guided by the highest standards of governance, transparency, ethics and financial rigour.”

The bank is expected to provide further updates during its Q1 2025 market briefing on 24 April.