Malta investor fund will not buy Bank of Valletta shares from Unicredit

The Maltese investor fund Amalgamated Investments SICAV has announced it will not purchase a 10% shareholding in Bank of Valletta from the Italian bank Unicredit.

The company said that the conditions in the April agreement to buy the stock had not been all satisfied by 31 October, leading to the termination of the agreement.

BOV announced that its second largest shareholder Unicredit would be disposing of its total shareholding earlier in 2018. Unicredit holds 52,500,439 shares in the bank, being 10.001% of the issued shareholding of the bank.

Amalgamated Investments SICAV p.l.c. is a multi-fund investment company, consisting principally of a portfolio of Maltese equity securities such as Bank of Valletta and HSBC Malta, and a portfolio of blue-chip investments that includes Google, Apple, Coca-Cola and McDonalds. As of October 2016, the total value of shareholder funds stood at €63.7 million.

The SICAV is ultimately owned by Mercury plc, a holding company of the Testaferrata Moroni Viani group. Shareholders Paul and Peter Testaferrata Moroni Viani formerly sat on the board of directors of Bank of Valletta and HSBC Malta.

The directors of Amalgamated Investments are former APS Bank chairman E.P. Delia, former APS director Joseph C. Caruana, and former HSBC Malta executive director Charles J. Farrugia.

Unicredit did not participate in Bank of Valletta’s rights issue in 2017, sending a strong signal that the bank was not interested in extending its relationship. When BOV became the first public company to be listed on the Malta Stock Exchange, 14.56% was held by Banco di Sicilia, which stake was later taken over by Capitalia in 2006, and a year later, following a merger, in the hands of Unicredit. That stake went down to 10% with BOV’s recent rights issue.

In recent years various foreign banks in Malta have disposed of their holdings, amongst them Volksbank, Banif – now renamed BNF – and more recently Lombard Bank’s Cypriot shareholding, which the National Development and Social Fund has offered to acquire.

The Unicredit shares derived from the 40 per cent of the nationalised Bank of Valletta in 1974 when the state investment arm Malta Development Corporation sold shares to Banco di Sicilia and the remainder to the Maltese public.

Unicredit has been a bit player in BOV’s overall strategy, and under Chief Executive Officer Jean Pierre Mustier, it focused entirely on cleaning up the lender’s balance sheet: selling €17.7 billion in non-performing loans to investors while Italy grappled with the pressure of more than €300 billion in non-performing loans. The crisis forced the Italian government to rescue some banks with the biggest bailouts in decades.