HSBC Bank Malta plc - Interim Directors’ Statement

On 9 November 2018, HSBC Bank Malta plc issued an Interim Directors’ Statement updating the market on its performance from January to September 2018.

The Bank noted that pre-tax profits were lower when compared to the first nine months of 2017 as a result of the persisting low interest rate environment, reduction in the corporate loan book (which offset the continued growth in mortgage business) and the full year effect of risk management actions undertaken during 2017. Loan impairment charges remained at a level within expectations and overall asset quality was satisfactory with a further reduction in corporate non-performing loans.

The Bank’s performance during the first nine months of 2018 was also dented by higher operating expenses reflecting investments in regulatory programmes and anti-financial crime as well as business growth initiatives. Nonetheless, HSBC Malta continued to exercise rigorous cost control, including the implementation of further digitalisation and processes optimisation measures.

From a regulatory perspective, the Bank noted its strong level of liquidity and capital ratios continued to exceed regulatory capital requirements (despite the redemption of a subordinated bond on 7 October 2018). In this respect, HSBC Malta also indicated that it will provide an update on its medium-term capital plan in the fourth quarter of this year.

Meanwhile, the Bank also explained that pre-tax profits for the period between 1 July 2018 to 30 September 2018 were higher than the comparable period last year due to lower credit losses.

Commenting on the Bank’s performance, HSBC Malta CEO Mr Andrew Beane said that “our results for this quarter were in line with expectations. HSBC’s commitment to operate to the highest global standards of financial crime compliance remains a signature strength and gives confidence to our customers, employees and shareholders. More broadly, it is essential for the reputation of Malta’s financial services industry that the sector as a whole is able to demonstrate full and effective compliance with all local and international obligations. For HSBC our risk management actions are now enabling increased focus on growth by investing in new and improved services for our customers … HSBC will be introducing further customer service enhancements in the coming months as we focus on measured customer-led growth.”