HSBC Bank Malta’s pre-tax profit increased by 32.6 per cent in the first six months of 2024 (1H 2024) to €78.6 million (1H 2023: €59.3 million), a record first-half performance driven by the higher interest rate environment.
The figures were announced on Wednesday (today) as part of the bank’s interim financial report for the six months ended 30th June 2024.
During the reporting period, net interest income surged upwards by €17 million to €106.6 million (1H 2023: €89.7 million), primarily a result of higher interest rates, with the average interest rates in 1H 2024 being higher than those of the same period last year.
Net fee income remained largely stable at €10.8 million (1H 2023: €10.7 million).
Income from HSBC Bank Malta’s insurance subsidiary amounted to €4.8 million, a notable increase from the €2 million reported during the comparative period in 2023.
During 1H 2024, the bank also reported a 13.3 per cent rise in operating expenses to a total of €56.1 million (1H 2023: €49.5 million). This was mainly due to increases in staff costs, IT expenses, and real estate costs, the latter prompted by investment in its new headquarters in Qormi.
In the reporting period, there was a release of €7 million in expected credit losses (ECL), compared to the €2.6 million release in 1H 2023. Both the retail and corporate business lines contributed to the release. The release in the corporate business line was mainly a result of amounts recovered from non-performing loans and an improvement in credit quality, while that of the retail business was primarily prompted by a release of provisions held for inflationary pressures which did not materialise.
HSBC Life Assurance (Malta) Ltd, the group’s life insurance company, reported €4.5 million in profit when compared to the €1.6 million in the same period in 2023. This was a result of an improvement in the composition and volume of new business together with yield curve and positive movements on the financial securities’ prices.
Net loans and advances to customers amounted to €3 billion, a decrease of €103 million (three per cent) when compared to the figure at the end of 2023. Non-performing loans continued to decrease by 28 per cent, while the bank also retained a prudent credit policy.
HSBC Bank Malta’s investment portfolio increased by €394 million to €1.7 billion as it invested in longer tenure assets to hedge against future movements in interest rates. Customer accounts were €6 billion as at the end of the reporting period, decreasing by 1.4 per cent from 31st December 2023.
Total capital ratio increased to 24.1 per cent during 1H 2024 when compared to 23.5 per cent as at the end of 2023.
HSBC Bank Malta’s Board of Directors has recommended an interim gross dividend of €0.10 per share, amounting to €36 million. It will be paid on 17th September 2024 to shareholders who are on the bank’s register of shareholders on 16th August 2024.
Commenting on the performance, CEO Geoffrey Fichte remarked that HSBC Bank Malta is celebrating 25 years in Malta, and the strong results in 1H 2024 “reflect the strong relationship with customers built over these years.”
HSBC Bank Malta CEO Geoffrey Fichte
“We’re growing revenue across all of our businesses and continue to invest for the long term. HSBC’s robust management of risk and focus on high-quality and long-term customer relationships continues to deliver results,” he said.
Mr Fichte pointed towards the signing of a three-year collective agreement to “energise” the bank’s talent, as well as the inauguration of its new headquarters, HSBC Hub, as key milestones during the year.
He thanked customers and shareholders for their support, noting that the gross interim dividend announced is its highest dividend over the last 10 years.
“Our capital and liquidity remain strong, and we continue to pursue growth opportunities in Malta,” Mr Fichte continued.
Through his final comment, he reaffirmed HSBC’s intentions to continue operating in Malta, despite there being no shortage of talks about a potential exit in recent years. Mr Fichte has repeatedly dismissed a possible departure from Malta, yet the wider HSBC Group has faced pressure from its shareholders to focus on its growing Asia business and shed operations in other markets.
