The news that Hili Group is the buyer of Unicredit’s to% share of Bank of Valletta was met with a resounding silence by the usual expert commentators of finance in the mainstream press. This is a big event in the small world of local finance and for various reasons. Hili Group and one of Malta’s biggest companies is taking up 4.99% ownership of Bank of Valletta (Unicredit previously owned 10% of the bank).
It is very likely that the regulator won’t allow Hili Group to own more than 5% of the bank’s shareholding. The regulator would only allow significant shareholding in local banks by certified financial entities and other banks and not individual traders or companies outside the world of finance and banking. Hili Group hasn’t yet explained the business and financial strategy behind this purchase.
The purchase has both positive and risky implications. First of all, it is extremely positive that a local company has sought interest in a publicly-listed company and made a successful large bid for its shares. This kind of activity and speculation in local markets should be highly encouraged in light of the very low trading volumes of the publicly-listed companies. The risky aspect of this purchase is that a large Maltese company which is also involved in projects deemed by the public to be parasitic, is now a significant owner of Malta’s most important bank and one of its most valuable national assets.
It will be up to the regulator to ensure that local businesses do not interfere with the independent operations of local banks or attempt to steer the banks’ financial activities in ways that favor their own interests.
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