HSBC Bank Malta plc - Interim Directors’ Statement

On 13 November, HSBC Bank Malta plc issued its Interim Directors’ Statement revealing an improved performance during the period 1 July 2012 to 13 November 2012. The improved performance was mainly due to the higher profitability in the life insurance business reflecting the rally across financial markets during the period. The latter also resulted in gains on disposals of available-for-sale securities.

Operating expenses for the period were higher than the comparable period in 2011 mainly due to restructuring costs. In fact, excluding such costs, the Group’s cost base for the period under review was broadly in line with that in the comparable period last year.

HSBC Malta reported a slight softening in demand for loans in line with the slowdown in the economy. Loan impairments are slightly higher but remain below expectations. At the same time, the Group reported that it maintains a well-diversified and conservative available-for-sale investment portfolio. HSBC also reported that institutional deposits increased while retail deposits were largely unchanged in spite of the significant competitive pressures.

Overall, the HSBC Malta Group maintained a strong liquidity position and a stable loans-to-deposits ratio during the period under review. Moreover, its capital ratio is above minimum regulatory requirements and sufficient to meet future challenges.

In conclusion, HSBC’s CEO Mark Watkinson expressed his satisfaction on the Bank’s positive performance during the period under review but remained cautious of the significant and growing challenges faced by the global economy.