HSBC Bank Malta p.l.c. reported a profit before tax of €41.3m for the six months ended 30 June 2016 compared with €36.3m for the same period in 2015. This represents an increase of €5m or 13.8% on the previous period.

Included within the reported results is the gain on disposal of the bank’s membership interest in Visa Europe. During the first half of 2016, Visa Inc. completed the acquisition of Visa Europe. As a result of this transaction, the bank received upfront cash consideration and preference shares. The total amount of income recognised in the reported results in relation to this transaction is €10.8m. This is a significant non-recurring event and therefore the income related to this transaction is excluded from the adjusted results to show the underlying business performance.

Adjusted performance was in line with the management’s forecasts.

Profit attributable to shareholders amounted to €26.9m resulting in earnings per share of 7.5 cents compared with 6.6 cents in the first half of 2015. Based on the higher dividend payout ratio of 65% approved earlier this year, the Board recommends an interim gross dividend of 7.1 cents per share (4.6 cents per share net of tax). This represents an increase of 40% compared with the interim dividends paid in 2015. The interim dividend will be paid on 9 September 2016 to shareholders who are on the bank’s register as at 12 August 2016.

Andrew Beane, Director and Chief Executive Officer of HSBC Malta, commented on the business performance and strategy execution: “Performance in the first half of 2016 was in line with expectations. While adjusted profitability continued to be impacted by negative interest rates and volatility in the earnings of the Insurance Company, we made good progress with the implementation of our new strategy that the Board approved in February. Important achievements included the signing of the Collective Agreement with our unions and the appointment of a new leadership team. Despite pay increases arising from union negotiations and further increases in regulatory related costs, the strong expense discipline we have established enabled us to keep adjusted costs flat to 2015, which was a good performance.”

He added: “I hope that shareholders will welcome the 40% increase in dividends which demonstrates the investment case to own HSBC Malta shares. In line with our strategy to be ‘the Bank of Choice’ for customers, we remain confident in our ability to increase underlying profitability over time without increasing risk appetite.