National golden passport fund lifts veto on new Lombard Bank share issue

During Friday’s annual general meeting, bank shareholders were informed of the appointment of two new directors representing the NDSF’s interests

Malta’s golden passport fund lifted its veto on a new share issue by Lombard Bank, a move that effectively dilutes its stake in the private institution unless it decides to take up the offer.

The National Development & Social Fund, whose revenues are generated by the sale of Maltese citizenship, on Friday voted in favour of a resolution to issue new shares and increase the bank’s share capital.

The NDSF, which holds a 49.01% stake in Lombard, had last year blocked the board’s proposal saying it was not accompanied by a presentation to shareholders, including the reasons for the issue.

It remains unclear what prompted the change of heart since the latest decision may dilute the NDSF’s stake by half unless it decides to invest more money to retain its strength. The NDSF has not communicated its reasoning publicly.

During Friday’s annual general meeting, bank shareholders were also informed of the appointment of two new directors representing the NDSF’s interests. This information had already been communicated through a market announcement and the directors are awaiting regulatory approval.

Despite holding the largest stake in the bank, the NDSF was not represented on the board, something which it requested last year.

The fund’s nominees are former PN international secretary John Bonello, and Chamber of SMEs president Paul Abela, were elected to the board of Lombard Bank.

Paul Abela (left) and John Bonello (right)
Paul Abela (left) and John Bonello (right)

The NDSF acquired 49.01% of Lombard’s shares in 2018 to retain domestic control after the exit of Lombard’s Cypriot shareholders.

The investment, valued at just over €51 million, was intended to facilitate the exit of the now-defunct Cyprus Popular Bank.

The move was a measure to safeguard the domestic position of Lombard, which is the owner of Malta’s major postal service, Maltapost.

The NDSF’s investment was in- tended to be a temporary one, however, since then the fund has not divested itself of its shareholding.

Over 1,200 shareholders, and investment funds, hold the remaining shares in Lombard, which besides the NDSF, include Virtu Holdings (9.89%), LifeStar Insurance (5.59%), and First Gemini p.l.c. (5.31%).

Lombard, which is run by CEO Joseph Said, has a controlling 71.5% stake in Redbox, the owner of postal operator Maltapost plc.


Clarification: This article has been amended to reflect the fact that the NDSF's shareholding may be diluted if it decides not to take up the new share offer.