HSBC Bank Malta plc – Interim Results
Following last week's article detailing the performance of the S&P 500 index in 2025, it is worth devoting time to review the developments across the European equity markers in my last article of the year.
Financial Performance
On 4 August 2026, HSBC Bank Malta plc published its interim results covering the six-month period ended 30 June 2026.
Net interest income fell by 4.8% to €85.6 million (H1 2025: €89.8 million) due to a decline in gross interest income (-5.3% to €96.4 million) which outweighed the reduction in interest expense (-9.6% to €10.8 million). HSBC explained that net interest income was negatively impacted by lower average market interest rates during the period.
Meanwhile, fee and trading income eased by €0.63 million, as net fee income increased by 2.4% to €11.0 million (H1 2025: €10.8 million), supported by growth in new lending and higher wealth sales, while trading income declined by 18.4% to €3.92 million following an exceptionally strong comparative performance in H1 2025.
The performance of the insurance business was also weaker, with HSBC Life Assurance (Malta) Ltd reporting a profit before tax of €1.9 million (H1 2025: €6.5 million), as movements in yields reversed compared to last year amid uncertain market conditions and weighed on the company’s investment results. Nonetheless, HSBC noted that new business generation across protection and long-term savings continued to perform well and ahead of last year, while the company maintained a very robust capital position with a Solvency ratio of 252% as at 30 June 2026.
The financial performance was supported by a net release of expected credit losses of €6.45 million, higher than the release of €3.04 million recorded in the same period last year. The release primarily reflected a recovery on a long-outstanding non-performing corporate loan and improved credit quality in the retail portfolio.
Operating expenses increased by 13.5% to €65.9 million (H1 2025: €58.1 million), largely reflecting notable expenses of €7.30 million made up of accelerated software amortisation following a revision of the estimated useful life, and staff-related payments in connection with the industrial dispute with the Malta Union of Bank Employees.
Excluding these one-off costs, operating expenses were broadly stable at €58.6 million (+0.9%). However, reflecting both the lower operating income and the higher cost base, the cost-to-income ratio deteriorated to 63.4% from 51.0% a year earlier.
HSBC’s reported profit before tax fell by 24.4% to €44.4 million compared to €58.7 million in the first half of 2025, while adjusted profit before tax, which excludes the one-off costs, declined by 11.9% to €51.7 million. The comparison with last year’s performance was also impacted by the interest rate environment, which was more favourable in H1 2025 than in the period under review. Even so, the results came in ahead of expectations. After accounting for a tax charge of €15.7 million, HSBC reported a net profit of €28.7 million (H1 2025: €38.3 million) which translates into an annualised return on average equity of 9.2% (H1 2025: 12.7%).
The Statement of Financial Position as at 30 June 2026 compared to the financial position as at 31 December 2025 shows that total assets decreased by 3.3% (or €271 million) to €7.88 billion, largely reflecting a decline in loans and advances to banks (-29.2% or €198 million to €481 million) and lower balances with the CBM, T-Bills and cash (-10.3% or €134 million to €1.16 billion), partly offset by an increase in financial investments (+3.9% or €98.4 million to €2.64 billion). Customer loans also decreased by 2.4% (or €66.6 million) to €2.70 billion.
Despite the reduction in customer loans, HSBC explained that it continued to grow new lending across both business lines, with new retail lending increasing by 27% and new corporate lending expanding by 75% compared to the same period last year. Portfolio quality also strengthened, as non-performing loans declined by 6% to €63.8 million, with HSBC noting that non-performing loans are at their lowest levels in recent years.
Total liabilities decreased by 3.6% to €7.25 billion, principally reflecting customer deposits which declined by 4.8% (or €315 million) to €6.21 billion. HSBC attributed the reduction to seasonal movements in corporate balances, while retail deposits increased and total customer deposits remained marginally higher than the €6.20 billion level as at 30 June 2025. As a result, the loan-to-deposit ratio increased to 43.4% from 42.3% in December 2025.
Shareholders’ funds remained virtually unchanged at €625 million, which translates into a net asset value per share of €1.736 (31 December 2025: €1.736). The Bank’s capital ratios remained strong and comfortably above regulatory requirements, with the Common Equity Tier 1 capital ratio standing at 24.7% (31 December 2025: 24.1%) and the Total Capital ratio at 27.8% (31 December 2025: 27.1%).
Dividend
The Board of Directors declared a second interim quarterly net dividend of €0.028 per share (€0.043 gross), equivalent to a gross amount of €15.5 million. Including the first quarterly dividend paid earlier in the year, the total net dividend in respect of H1 2026 amounts to €0.051 per share (H1 2025: €0.065), equivalent to a gross dividend per share of €0.079 or €28.5 million, and represents a payout ratio of 60% after adjusting for the costs of the industrial dispute. The dividend will be paid on 23 September 2026 to shareholders as at the close of trading on 14 August 2026.
Proposed Acquisition by CrediaBank
On 23 December 2025, HSBC Continental Europe (HBCE) and CrediaBank S.A. entered into a definitive agreement for the sale and purchase of HBCE’s entire 70.03% shareholding in HSBC Malta, under which CrediaBank would become the majority shareholder of the bank. The transaction remains subject to regulatory approvals from the Malta Financial Services Authority, the Bank of Greece and the European Central Bank, and under its terms CrediaBank is to pay a price of €0.793 per share, amounting to a total consideration of €200 million. HSBC Malta, HBCE and CrediaBank have also entered into a cooperation agreement to govern their respective obligations in relation to the transaction. The proposed acquisition is understood to be viewed favourably by the European Central Bank, partly in view of CrediaBank’s wide free float and the presence of large institutional investors on its share register. The Directors noted that the transition to the new majority shareholder is progressing, with the bank working closely with HBCE and CrediaBank to ensure a smooth and orderly transition that safeguards the stability and continuity of the bank for its customers, colleagues, and shareholders.
Outlook
HSBC Malta’s CEO Mr Geoffrey Fichte described the results as a strong and resilient first half performance, supported by rising transaction volumes and broad-based momentum across new customers, personal lending, wealth and insurance. He noted that new corporate lending increased to support businesses and the wider economy, while deposits grew year-on-year, reinforcing the bank’s funding strength. Backed by the bank’s strong capital and liquidity ratios and solid first half profitability, Mr Fichte stated that HSBC Malta is well positioned for the future and will continue to reward shareholders with quarterly dividends.
The article contains public information only and is published solely for informational purposes. It should not be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in this article. Rizzo, Farrugia & Co. (Stockbrokers) Ltd (“Rizzo Farrugia”) is under no obligation to update or keep current the information contained herein. Since the buying and selling of securities by any person is dependent on that person’s financial situation and an assessment of the suitability and appropriateness of the proposed transaction, no person should act upon any recommendation in this article without first obtaining investment advice. Rizzo Farrugia, its directors, the author of this article, other employees or clients may have or have had interests in the securities referred to herein and may at any time make purchases and/or sales in them as principal or agent. Furthermore, Rizzo Farrugia may have or have had a relationship with or may provide or has provided other services of a corporate nature to companies herein mentioned. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any security mentioned in this article. Neither Rizzo Farrugia, nor any of its directors or employees accepts any liability for any loss or damage arising out of the use of all or any part of this article. Additional information can be made available upon request from Rizzo, Farrugia & Co. (Stockbrokers) Ltd., Airways House, Fourth Floor, High Street, Sliema SLM 1551. Telephone: +356 2258 3000; Email: info@rizzofarrugia.com; Website: www.rizzofarrugia.com © 2021 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved. This article may not be reproduced or redistributed, in whole or in part, without the written permission of Rizzo Farrugia. Moreover, Rizzo Farrugia accepts no liability whatsoever for the actions of third parties in this respect.
This article was produced by Edward Rizzo, Director at Rizzo Farrugia, which is a company licensed to undertake investment services in Malta by the MFSA under the Investment Services Act, Cap. 370 of the Laws of Malta and a member of the Malta Stock Exchange. The company’s registered address is at Airways House, Fourth Floor, High Street, Sliema SLM 1551, Malta.
The article contains public information only and is published solely for informational purposes. It should not be construed as a solicitation or an offer to buy or sell any securities or related financial instruments. No representation or warranty, either expressed or implied, is provided in relation to the accuracy, completeness or reliability of the information contained herein, nor is it intended to be a complete statement or summary of the securities, markets or developments referred to in this article. Rizzo, Farrugia & Co. (Stockbrokers) Ltd (“Rizzo Farrugia”) is under no obligation to update or keep current the information contained herein. Since the buying and selling of securities by any person is dependent on that person’s financial situation and an assessment of the suitability and appropriateness of the proposed transaction, no person should act upon any recommendation in this article without first obtaining investment advice. Rizzo Farrugia, its directors, the author of this article, other employees or clients may have or have had interests in the securities referred to herein and may at any time make purchases and/or sales in them as principal or agent. Furthermore, Rizzo Farrugia may have or have had a relationship with or may provide or has provided other services of a corporate nature to companies herein mentioned. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Foreign currency rates of exchange may adversely affect the value, price or income of any security mentioned in this article. Neither Rizzo Farrugia, nor any of its directors or employees accepts any liability for any loss or damage arising out of the use of all or any part of this article. Additional information can be made available upon request from Rizzo, Farrugia & Co. (Stockbrokers) Ltd., Airways House, Fourth Floor, High Street, Sliema SLM 1551. Telephone: +356 2258 3000; Email: info@rizzofarrugia.com; Website: www.rizzofarrugia.com © 2021 Rizzo, Farrugia & Co. (Stockbrokers) Ltd. All rights reserved. This article may not be reproduced or redistributed, in whole or in part, without the written permission of Rizzo Farrugia. Moreover, Rizzo Farrugia accepts no liability whatsoever for the actions of third parties in this respect.
This article was produced by Edward Rizzo, Director at Rizzo Farrugia, which is a company licensed to undertake investment services in Malta by the MFSA under the Investment Services Act, Cap. 370 of the Laws of Malta and a member of the Malta Stock Exchange. The company’s registered address is at Airways House, Fourth Floor, High Street, Sliema SLM 1551, Malta.