Two Maltese banks are currently vying for Volksbank, which has to be sold by 2015.

Sources said one bid is from an ambitious wealth management bank, which clearly has its eye on Volksbank’s retail licence and MFSA-approved officers, which would give it an immediate high street presence with considerable potential to grow.

The other is a local bank which would appear to be considering the purchase merely to block its rival from being in a position to take its market share.

Sources said that the due diligence exercises would be carried out over the coming weeks.

None of the parties were in a position to comment.

The sale is the result of the purchase by the Austrian state of 43 per cent of its parent company, Oesterreichische Volksbanken-AG, in 2012, one of the conditions of which was that it would divest itself of its overseas network, ranging from regional and specialised banks and credit cooperatives, to Volksbank in Malta.

The process of selling Volksbank in Sliema started in April, when the management team started to downsize its overseas investments, which were sold to other banks outside Malta.

An advisor on mergers and acquisitions was appointed in mid-September and around 130 parties expressed initial interest. Twenty of them gave positive feedback, and half of them were sent further details and invited to bid.

Volksbank Malta made a profit of €2.2 million in 2012, although in anticipation of the sale, its balance sheet has been reduced from €1 billion to €211 million. It has €15 million in retained earnings.