HSBC Bank Malta plc - Full-Year Results & Dividends

Friday, February 11th, 2005

The Board of Directors of HSBC Bank Malta p.l.c. issued the preliminary profits statement for the year ended 31st December 2004.

During the twelve months ended 31 December 2004, HSBC Bank Malta plc and its subsidiaries generated net interest income of Lm39.5 million, an increase of 13.8% over last year. The net interest margin improved considerably from 50% last year to 58.9%. The HSBC Malta Group also saw a 6.8% growth in its non-interest income from Lm18.7 million to Lm19.9 million. Operating expenses increased minimally to stand at Lm30.7 million resulting in a significant improvement in the cost to income ratio from 56.8% in 2003 to 51.1%.

Operating profit before impairment reversals and provisions amounted to Lm28.7 million, an increase of Lm5.9 million (26.1%) over last year. Net impairment reversals during the year totalled just over Lm4 million.

The HSBC Malta Group generated a record profit before tax of Lm33 million during the twelve months of 2004, an increase of 26.3% over last year’s profit. After deducting tax of Lm10.9 million, the profits for the year total Lm22.1 million, resulting in earnings per share of 60c7 (2003: 46c).

The Group balance sheet shows total assets rising by 3.8% to Lm1.6 billion as a result of a strong rise in loans and advances to customers, mainly related to mortgage lending. These increased by Lm56.9 million (6.2%) to stand at Lm979 million. Meanwhile customers deposits also increased during the period under review and as at the end of 2004 totalled Lm1.29 billion (+1.7%). Shareholders’ funds of Lm135 million translate into a net asset value per share of 368c9. Return on equity works out at 16.7% (2003: 13.5%) with return on assets at 2.1% (2003: 1.7%).

The Directors are proposing a final gross dividend of 27c3 per share (final 2003 of 24c6), which together with the interim dividend of 19c4 paid in August 2004, totals 46c7 in dividends for 2004, a 31.9% rise over the 2003 dividend. This excludes the special gross dividend of 35c4 paid in August 2004. The final dividend of 27c3 per share will be paid on 24 March 2005 to all those shareholders appearing on the Company’s register as at close of trading on Wednesday 16 February 2005. The equity begins trading XD as from 17 February.

Moreover, the Board of Directors have also announced that it would be recommending a ‘2 for 1’ share split for approval at the forthcoming Annual General Meeting. If this is approved, the nominal value of the shares will halve from 25c to 12c5 per share.

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