HSBC Bank Malta has agreed to contribute up to €10 million towards a settlement with its employees, bringing an end to a prolonged industrial dispute linked to the bank’s pending takeover by CrediaBank.

The agreement, announced in a company statement on Tuesday, was reached with the Malta Union of Bank Employees and is expected to take effect following the completion of HSBC Malta’s sale to CrediaBank. The bank said the payment will be made in the form of ex gratia payments to qualifying employees, subject to the bank’s profitability and capital position not materially deteriorating.

The settlement clears a hurdle in the takeover process, which has been closely watched by regulators, staff, and the wider financial sector.

HSBC Malta also confirmed that its parent company, HSBC Continental Europe, has now entered into a definitive agreement with CrediaBank for the sale and purchase of its majority shareholding in the Maltese bank.

The transaction follows the completion of the French works council process and replaces an earlier put option arrangement announced earlier this year.

Alongside the sale agreement, HSBC Malta, HSBC Continental Europe, and CrediaBank have signed a cooperation agreement setting out their respective obligations related to the transaction. As previously announced, the takeover remains subject to the necessary corporate and regulatory approvals.

The dispute with employees had emerged earlier this year after MUBE argued that a change in ownership triggered provisions in workers’ collective agreements entitling staff to terminal-style benefits. HSBC Malta had disputed that interpretation, maintaining that the bank was continuing operations rather than closing down, and that employee jobs had been safeguarded as part of the takeover.

Despite the disagreement, negotiations continued over several months, with strike action at times being suspended and reinstated as talks progressed. The newly announced agreement formally resolves the dispute and removes uncertainty for both staff and management as the ownership transition moves forward.

Once completed, the transaction will see CrediaBank acquire a controlling stake in HSBC Malta, marking one of the most significant shifts in Malta’s banking landscape in recent years. HSBC Malta said it will continue to keep the market informed in line with its obligations under the Capital Markets Rules issued by the Malta Financial Services Authority.