HSBC Bank Malta plc - Interim Directors’ Statement

On 19 May, HSBC Bank Malta plc published its Interim Directors’ Statement covering its performance during the first few month of 2014.

During the period under review, HSBC’s performance was below the same period last year in view of the very challenging market conditions. The main factors adversely impacting the profitability of the HSBC Group were interest margin compression, slow loan growth and a reduced contribution from the life insurance business (in the 2013 comparative period the life insurance business benefitted from a significant one-off gain).

Furthermore, the Group incurred a rise in operating expenses largely reflecting the costs related to compliance as well as increased regulatory fees. Meanwhile, underlying expenses have been well controlled and significant work continues around streamlining the business for greater efficiency.

The Group’s performance was also adversely impacted by higher loan impairments although still lower than forecast and mainly due to the higher number of recoveries registered in 2013.

In conclusion, the HSBC Group CEO Mr Mark Watkinson said that the European market remains very difficult and the low interest rate environment presents its own set of issues for an organisation like HSBC. Nonetheless, the HSBC Group continues to build its business and invest in its franchise. Furthermore, the growth in the pipeline of commercial and retail new business is encouraging although 2014 is likely to be a challenging year for both HSBC and the banking industry in general.