Friday 15 December 2017

84 - HSBC Bank Malta plc Interim Results 2012 - 27 July - 01

HSBC announces positive interim results

Pictured above:  Josephine Magri, Chief Financial Officer, Albert Mizzi, Chairman, and Mark Watkinson, Chief Executive Officer of HSBC Malta during the announcement of the 2012 interim results.

The Board of Directors of HSBC Bank Maltap.l.c. recently approved the Group and Bank Interim Accounts for the six-month period up to 30 June 2012.

Mark Watkinson, Director and Chief Executive Officer of HSBC Malta, said: “We have delivered another positive set of results that saw pre-tax profit increase by 6% with a return on equity of 17.8%. The bank’s capital and liquidity position remain strong and we have a firm grip on risks and costs at a time when we are seeing continuing pressure on revenue as a result of the challenges in the Eurozone.

“Despite the difficulties in Europe we have a clear strategy focused around simplifying our business, reducing bureaucracy and improving efficiency. As part of the world’s largest international bank we are well placed to service the needs of our customers and to support the Maltese economy.

Net interest income increased by 5% to €68m compared with €64m in the first half of 2011. The increase reflected growth in mortgage lending and improved positioning of the balance sheet management available-for-sale portfolio.

Net fee and commission income of €16m for the six months ended 30 June 2012 compared with €17m in June 2011.  Growth in funds under administration and higher levels of custody fees more than off-set lower card fees following the sale of the merchant card acquiring business in December 2011.

HSBC Life Assurance (Malta) Ltd reported a profit before tax of €7m, compared with €13m in the first half of 2011.  The first half of 2011 benefitted from a non-recurring gain of €7m as a result of the refinement in the methodology used to calculate the present value of in-force long-term insurance business. New business particularly with respect to life-insurance protection and higher investment income as a result of improved global market conditions partially offset this non-recurring gain.

A net gain of €2m was reported on the disposal of available-for-sale securities compared to a net loss of €4m in the comparable period in 2011.

Operating expenses at €45m increased by €3m or 6%, impacted by non-recurring staff cost recoveries in the first half of 2011 of €2m, mainly relating to the release of an early voluntary retirement provision. On a like-for-like basis, costs were well controlled and broadly in line with the first half of 2011 with the increase in amortisation due to the impact of the implementation of a new computer banking system introduced during 2011. Cost efficiency ratio reported at 45.4% compared to 43.8% in the prior period.

At a consolidated level, net impairments reduced from €4m to €0.8m in 2012. This was principally due to a €2m impairment taken on Greek government bonds held by the life insurance subsidiary in its available-for-sale bond portfolio. Following the Greek bonds restructuring programme, the life insurance subsidiary has disposed of all its Greek debt exposure and now holds no exposure to southern European government debt.

Loan impairments declined to €0.8m (five basis points of the overall loans book) against €1.8m in 2011 as the profit or loss benefitted from modest recoveries.  At a bank level, non-performing loans remained stable at 5% of gross loans and asset quality remains good.

Net loans and advances to customers increased marginally by €20m to €3,364m. Mortgage market share remained stable. The bank has seen a slight softening in loan demand due to slowing economic conditions. Gross new lending to customers amounted to €274m which reflects the bank’s continued support to the local economy.

Customer deposits rose by €257m to €4,660m as at 30 June 2012 reflecting an increase in corporate and institutional deposits. The levels of retail deposits were broadly unchanged despite significant competitive pressure for deposits including from local government bond issuance.

The bank’s available-for-sale investments portfolio remains well diversified and conservative.

The bank’s liquidity position remains strong with advances to deposits ratio of 72%, compared with 76% at 31 December 2011.

The bank continued to strengthen its capital ratio to 11.8%. This exceeds the 8% minimum regulatory capital requirement. The bank intends to maintain a conservative approach to capital and will continue to build capital where appropriate.

Mark Watkinson said: “I would like to take this opportunity to thank our staff, directors and shareholders for their commitment, hard work and support during the first half of 2012.”

The Board is declaring an interim gross dividend of 10 cent per share (6.5 cent net of tax). This will be paid on 22 August 2012 to shareholders who are on the bank’s register of shareholders at 8 August 2012.

 

 

 

Powered by