APS Bank plc - Initial Public Offering

On 26 May 2022, APS Bank plc published a Prospectus in relation to the offer for sale of up to 110 million shares at €0.62 each with a total value of just over €66 million. A total of 69,681,981 shares (€41.4 million) have already been reserved for subscriptions by Authorised Intermediaries and as such, the remaining amount of 40,318,019 shares (€25 million) are available for subscription during the upcoming offer period.

APS Bank plc is a well-established community bank whose major shareholders are the Archdiocese of Malta (with an indirect stake of 79.44%) and the Diocese of Gozo (18.2%). The Bank offers a wide range of personal and corporate banking, transaction and credit facilities as well as investment solutions mainly through a network of 11 branches located across Malta and Gozo. As at the end of 2021, the Bank had total assets of just under €2.8 billion and shareholders’ funds of €202.2 million. APS is thus the fourth largest financial institution in Malta by total assets and the third largest in terms of deposits held by Maltese residents. In January 2020, APS was classified by the Central Bank of Malta and the Malta Financial Services Authority as an ‘Other Systemically Important Institution’ (“O-SII”), thus requiring the Bank to hold additional capital buffers due to its systemic importance to Malta’s financial stability and economy.

The salient features of the offer are as follows:

Amount of Shares on Offer:

Up to 110 million shares which would represent 30.58% of the total issued share capital.

Share Offer Price:

€0.62 per share.

Reasons for the Offer & Use of Proceeds:

The net proceeds from the share issue, estimated at €65.3 million after issuance costs, will constitute an integral part of the Bank’s capital plan to further strengthen its CET 1 capital, and also enable APS to achieve its strategic objectives whilst ensuring compliance with regulatory capital requirements. The share offer does not constitute a sale of shares from existing shareholders.

Lock-In Arrangement:

Subject to a number of conditions as explained in Section 9.2 – ‘Rights attaching to the New Shares’ of the Prospectus, the Archdiocese of Malta (through AROM Holdings Limited) and the Diocese of Gozo have undertaken not to offer, sell, grant any option, right or warrant to purchase or otherwise transfer, assign or dispose of, any of the shares which they hold in APS for a period of 24 months from the date when the shares are admitted to listing on the Official List of the Malta Stock Exchange.

Plan of Distribution:

  • Pre-Allocation Agreements: An amount of 69,681,981 shares (€41.4 million) has been reserved for subscriptions by Authorised Intermediaries through Pre-Allocation Agreements.
  • Preferred Applicants & the general public: The remaining amount of 40,318,019 shares (€25 million) is available for subscription during the offer period that closes on 17 June 2022 or earlier by: (i) ‘Preferred Applicants’ – namely APS bondholders as at close of trading on 19 May 2022 and Bank employees; and (ii) the general public.

Dividend Policy:

APS intends to adopt a dividend policy that prudently balances the payout to shareholders and the need for the Bank to retain capital with a view of maintaining healthy solvency and liquidity ratios to support future growth. The payments of any dividend will depend upon, among other factors, the Bank’s capital requirements, the profits available for distribution for the relevant year, the Bank’s growth strategy, and its overall view on the prevailing market outlook, general economic conditions, and any regulatory restrictions that may be imposed by supervisory authorities.

The Bank is expecting to distribute dividends that do not exceed half of its annual profits. However, for the financial years ending 31 December 2022, 2023, and 2024, it is the Bank’s intention to distribute one-third of its post-tax profits which would translate into net dividend yields of between 2.1% and 2.8%. In the spirit of balancing shareholders’ returns with internal capital generation and regulatory requirements, APS may consider paying dividends by way of scrip, which essentially means providing the option to shareholders to receive the dividend in either cash or through the issue of new shares.

Offer Period:

3 June 2022 to 17 June 2022. However, the Bank is reserving the right to close the Offer Period prior to the closing date.

Minimum Subscription Amount:

1,000 shares (equivalent to €620).

Listing:

The shares of APS Bank plc are expected to be admitted to the Official List of the Malta Stock Exchange on 30 June 2022 and trading is expected to commence on 1 July 2022.

Download:

APS Bank plc – Investor Presentation

APS Bank plc – Prospectus dated 24 May 2022

APS Bank plc – IPO Fact Sheet

 

Disclaimer:

Investors wishing to acquire the shares should read the Prospectus (in particular the ‘Risk Factors’) before making any investment decision in order to fully understand the potential risks and rewards associated with an investment in the shares. A copy of the Prospectus is available on Rizzo, Farrugia & Co. (Stockbrokers) Limited’s website. The investment in the shares may not be suitable for all investors and prospective participants are urged to consult their financial advisers as to the suitability or otherwise of acquiring the shares. The value of the investment and the income therefrom may go down as well as up and investors may lose some or all of the money invested.

This webpage has been prepared based on the Prospectus dated 24 May 2022 issued by APS Bank plc and no representations or guarantees are made by Rizzo, Farrugia & Co. (Stockbrokers) Ltd with respect to the accuracy of the data. This webpage is for information purposes only. It is NOT intended to be and should NOT be construed as an offer or solicitation to acquire or dispose of any of the securities or issues mentioned herein. Rizzo, Farrugia & Co. (Stockbrokers) Ltd accepts no responsibility or liability whatsoever for any expense, loss or damages arising out of, or in any way connected with, the use of all or any part of this webpage.

This advertisement has been issued by Rizzo, Farrugia & Co. (Stockbrokers) Limited, a company licensed to undertake investment services in Malta by the MFSA under the Investment Services Act, Cap. 370 of the Laws of Malta, and having its registered address at Airways House, Fourth Floor, High Street, Sliema SLM 1551, Malta.

Rizzo, Farrugia & Co. (Stockbrokers) Ltd is acting as Joint Sponsor and Manager to APS Bank plc.