CrediaBank has told its investors that its planned acquisition of HSBC Malta is being carried out at a steep discount, with the deal valued at €228 million below the bank’s book value.

In a presentation to investors – seen by Times of Malta – CrediaBank described the acquisition as “a possibility to complete the transaction at a price which would generate a substantial badwill and significant profit after tax accretion.” The bank quantified the “expected badwill” at €228 million.

Badwill arises when a company is acquired for less than its book value, which represents the amount shareholders would receive if the business were liquidated. HSBC Malta’s total book value is estimated at around €600 million, with the 70% stake being sold valued at approximately €428 million. The agreed sale price of €200 million therefore reflects a discount of nearly 55%.

The agreement between HSBC and CrediaBank was announced on Tuesday, with CrediaBank set to acquire a 70% shareholding – roughly 252 million shares – at a rate of €0.793 per share. The purchase remains subject to regulatory approval, and the bank has said it expects to close the transaction by the end of 2026.

Beyond the €200 million cash outlay, CrediaBank will also be required to make a mandatory offer to HSBC Malta’s minority shareholders, who collectively hold the remaining 30% of shares. It has pledged to offer €1.44 per share, above the prevailing market rate at the time of the announcement. If all minority shareholders opt to sell, this would amount to an additional €155 million.

The presentation also noted that competition for the deal had been limited, citing Malta’s market size, antitrust restrictions for domestic bidders, and interest from banks based outside the European Central Bank’s jurisdiction.