HSBC retreats as profits & dividends decline

The share price of HSBC Bank Malta plc shed 2% to a fresh 5-month low of €2.50 across eight deals totalling 31,000 shares. Prior to the opening of this morning’s trading session, the HSBC Malta Group published its 2013 financial statements revealing a 5.1% drop in pre-tax profits to €90.5 million largely due to the continued pressure on interest margin as well as lower investment returns from the life assurance subsidiary. These were only partially offset by lower costs and impairments. The final gross dividend was lowered by 34.2% to €0.152 per share following the decline in profits as well as amendments to the MFSA Banking Rule 09 which requires banks to create a reserve against non-performing loans from the declared dividend distribution. Shareholders as at the close of trading on 12 March will be eligible for the final dividend. The Directors also recommended a 1 for 9 bonus issue to all shareholders as at the close of trading on 24 April 2014.

The share price of Island Hotels Group Holdings plc also eased 2.1% lower to the €0.93 level on a deal of 3,000 shares. Last Friday, Island Hotels revealed a turnaround in performance with pre-tax profits of €0.45 million during the year ended 31 October 2013. The improvement was largely due to higher occupancy at the three hotels as well as increased operational efficiency both in its hotels and vacation ownership business. Last week Island Hotels also announced that it entered into a promise of sale for the Coastline Hotel for €14 million and that it was awarded the exclusive right to develop the Costa Coffee brand in Spain (East Coast), Balearic Islands and Canary Islands. Apart from seeking fresh equity capital, Island Hotels also indicated that it is also planning the issuance of a new bond on the local market.

The only other negative performing equity was Crimsonwing plc with a 1.2% drop to €0.81 on volumes of 15,100 shares.

On the other hand, the equity of GO plc inched a further 0.5% higher to yet another 4-year high of €2.11 on volumes of 2,000 shares. Similarly, Malta International Airport plc gained 0.7% to €2.165 on a small deal of 500 shares.

MaltaPost plc’s equity also closed in positive territory with a 0.9% increase to €1.11 across four trades totalling 21,267 shares.

Meanwhile, no change was registered in the share price of Bank of Valletta plc as the banking equity failed to hold on to an intra-day high of €2.485 to end the day unchanged at the €2.46 level across twelve deals totalling 10,232 shares. Likewise, the equity of Malita Investments plc held on to the €0.545 on volumes of 10,430 shares ahead of the Company’s full-year results publication tomorrow.

On the bond market, the Rizzo Farrugia MGS Index edged minimally higher to 1,025.753 points level as Eurozone yields eased marginally to the 1.675% level.