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HSBC Bank Malta plc – Interim Results

Jonathan Falzon

July 30, 2025

30 July, 2025
6 min read
30 July, 2025
6 min read

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 30 July 2025, HSBC Bank Malta plc published its interim results covering the six-month period ended 30 June 2025.

Net interest income fell by 15.7% to €89.8 million (H1 2024: €106.6 million) due to a decline in gross interest income (-15% to €101.8 million) which outweighed the reduction in interest expense (-8.7% to €12 million). HSBC explained that the performance was negatively impacted by the reduction in the ECB deposit rate facility since June 2024.

Meanwhile, non-interest income rose by 14.9% to €24.3 million (H1 2024: €21.1 million), reflecting an improved performance across all other business lines including fee income, life insurance, asset management, and foreign exchange trading.

The financial performance was supported by a net reversal of expected credit losses of €3.0 million, which however was lower than the reversal of €7.0 million recorded in the same period last year. The net release was made up of a €3.3 million release in the retail business due to a re-assessment of loss rate and loss given default parameters used for mortgage ECL calculations. partially offset by a €0.3 million charge in the commercial business.

Operating costs increased by 4.1% to €58.4 million (H1 2024: €56.1 million) driven by higher staff costs, increased depreciation and amortisation, and expenses to comply with new regulatory requirements. As a result of lower operating income and higher operating expenses, the cost-to-income ratio deteriorated to 51.2% from 43.9% a year earlier.

HSBC’s profit before tax fell by 25.3% to €58.7 million compared to €78.6 million in the first half of 2024. After accounting for a tax charge of €20.4 million, HSBC reported a net profit of €38.3 million (H1 2024: €50.7 million) which translates into an annualised return on average equity of 12.7% (H1 2024: 18.3%).

The Statement of Financial Position as at 30 June 2025 compared to the financial position as at 31 December 2024 shows that total assets increased by 2.1% (or €159 million) to €7.90 billion. Customer loans decreased by 2.9% (or €82 million) to €2.79 billion and balances with the CBM, T-Bills and cash dropped by 3.1% (or €33 million) to €1.04 billion. Meanwhile, financial investments increased by 8.6% (or €197 million) to €2.49 billion. Total liabilities rose by 2.0% to €7.28 billion principally composed of customer deposits, which increased by 0.7% (or €45 million) to €6.20 billion. As a result, the loan-to-deposit ratio decreased to 45.0% from 46.7% in December 2024. Shareholders’ funds increased by 2.4% (or €14.6 million) to €616 million which translates into a net asset value per share of €1.708 (31 December 2024: €1.668). The Bank’s capital ratios remained relatively unchanged with the Common Equity Tier 1 capital ratio standing at 22.5% (31 December 2024: 22.6%) and the Total Capital ratio at 25.4% (31 December 2024: 25.6%).

Dividend

The Board of Directors declared an unchanged net interim dividend of €0.065 per share, The dividend is payable on 23 September 2025 to all shareholders as at close of trading on 18 August 2025.

Outlook

HSBC Malta’s CEO Mr Geoffrey Fichte explained that the bank continues to generate strong profits despite lower interest rates. He emphasised that the company will continue to invest in technology, people, and customer service while promoting services through ongoing marketing efforts. Mr Fichte highlighted a new competitive mortgage campaign and renewed commercial agreements with the Malta Development Bank, Trade Malta, and the Chamber of Commerce aimed at growing the commercial banking business. He stated that the bank remains positive on the Maltese economy despite global uncertainty since Malta’s robust and diversified economic growth is well positioned for future success.

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.

On 30 July 2025, HSBC Bank Malta plc published its interim results covering the six-month period ended 30 June 2025.

Net interest income fell by 15.7% to €89.8 million (H1 2024: €106.6 million) due to a decline in gross interest income (-15% to €101.8 million) which outweighed the reduction in interest expense (-8.7% to €12 million). HSBC explained that the performance was negatively impacted by the reduction in the ECB deposit rate facility since June 2024.

Meanwhile, non-interest income rose by 14.9% to €24.3 million (H1 2024: €21.1 million), reflecting an improved performance across all other business lines including fee income, life insurance, asset management, and foreign exchange trading.

The financial performance was supported by a net reversal of expected credit losses of €3.0 million, which however was lower than the reversal of €7.0 million recorded in the same period last year. The net release was made up of a €3.3 million release in the retail business due to a re-assessment of loss rate and loss given default parameters used for mortgage ECL calculations. partially offset by a €0.3 million charge in the commercial business.

Operating costs increased by 4.1% to €58.4 million (H1 2024: €56.1 million) driven by higher staff costs, increased depreciation and amortisation, and expenses to comply with new regulatory requirements. As a result of lower operating income and higher operating expenses, the cost-to-income ratio deteriorated to 51.2% from 43.9% a year earlier.

HSBC’s profit before tax fell by 25.3% to €58.7 million compared to €78.6 million in the first half of 2024. After accounting for a tax charge of €20.4 million, HSBC reported a net profit of €38.3 million (H1 2024: €50.7 million) which translates into an annualised return on average equity of 12.7% (H1 2024: 18.3%).

The Statement of Financial Position as at 30 June 2025 compared to the financial position as at 31 December 2024 shows that total assets increased by 2.1% (or €159 million) to €7.90 billion. Customer loans decreased by 2.9% (or €82 million) to €2.79 billion and balances with the CBM, T-Bills and cash dropped by 3.1% (or €33 million) to €1.04 billion. Meanwhile, financial investments increased by 8.6% (or €197 million) to €2.49 billion. Total liabilities rose by 2.0% to €7.28 billion principally composed of customer deposits, which increased by 0.7% (or €45 million) to €6.20 billion. As a result, the loan-to-deposit ratio decreased to 45.0% from 46.7% in December 2024. Shareholders’ funds increased by 2.4% (or €14.6 million) to €616 million which translates into a net asset value per share of €1.708 (31 December 2024: €1.668). The Bank’s capital ratios remained relatively unchanged with the Common Equity Tier 1 capital ratio standing at 22.5% (31 December 2024: 22.6%) and the Total Capital ratio at 25.4% (31 December 2024: 25.6%).

Dividend

The Board of Directors declared an unchanged net interim dividend of €0.065 per share, The dividend is payable on 23 September 2025 to all shareholders as at close of trading on 18 August 2025.

Outlook

HSBC Malta’s CEO Mr Geoffrey Fichte explained that the bank continues to generate strong profits despite lower interest rates. He emphasised that the company will continue to invest in technology, people, and customer service while promoting services through ongoing marketing efforts. Mr Fichte highlighted a new competitive mortgage campaign and renewed commercial agreements with the Malta Development Bank, Trade Malta, and the Chamber of Commerce aimed at growing the commercial banking business. He stated that the bank remains positive on the Maltese economy despite global uncertainty since Malta’s robust and diversified economic growth is well positioned for future success.