HSBC Bank Malta plc - Interim Directors’ Statement

On 18 November, HSBC Bank Malta plc issued its Interim Directors’ Statement providing an update on the Group’s performance since the half-year ended on 30 June 2013.

During the period under review, HSBC Malta reported a modest decline in pre-tax profits mainly due to a narrowing interest margin amid the prevailing low interest rate scenario. Furthermore, the Group registered a lower contribution from its life insurance business due to lower fair value movements from the life insurance investment book.

The HSBC Malta Group also incurred lower expenses largely reflecting the non-recurrence of restructuring costs accounted for in the prior year. Excluding such costs, operating expenses were relatively unchanged as the savings achieved from last year’s  measures were offset by higher levels of regulatory and governance costs.

Loan impairments were also broadly unchanged and below expectations in spite of the regional economic uncertainties.

The Directors also explained that given the prevailing challenging market conditions, demand for personal and commercial loans was muted although there are initial indications of increases in these lines of business.  Customer deposits were also broadly unchanged during the period despite the on-going competitive pressures for deposits. Additionally, the Bank’s available-for-sale portfolio remains well diversified and conservatively positioned. Furthermore, HSBC Malta maintained a strong liquidity and capital position.

In conclusion, CEO Mr Mark Watkinson explained that although the European market remains very difficult and the low interest rate environment is challenging, the aim of the HSBC Malta Group remains to generate a resilient performance whilst focusing on the long-term sustainability of its business as well as to leverage on HSBC’s global network to create opportunities for its clients.