During the twelve months ended 31 December 2003, HSBC Bank Malta plc and its subsidiaries generated net interest income of Lm34.7 million, up by 4.1% compared to the twelve months of 2002. The net interest margin improved from 43.8% to 50%. Non-interest income of Lm18.7 million is 2.1% higher than last year. The HSBC Group incurred higher operating expenses (+ 6%) as a result of an increase in termination benefits payable on early retirement schemes. This resulted in a deterioriation in the cost to income ratio, which now stands at 56.7% (2002: 55.4%).
Operating profit before impairment provisions amounted to Lm22.8 million, marginally up over last year's level. Net impairment releases of Lm3.4 million as against Lm1.5 million in impairment provisions taken last year resulted in profit before tax increasing by 23.8% to Lm26.2 million. Profit after tax increased by 9.2% to Lm16.8 million. Thus, earnings per share increased from 42.1c to 46.0c per share.
Despite an increase of 3.6% in loans and advances to customers, total assets decreased by 1.9% to Lm1,539 million. Customers deposits decreased by 2.8% or Lm36m and as at 30 December 2003 totalled Lm1,267 million. Shareholders’ funds of Lm131 million give a net asset value per share of Lm3.59. Compared to a current market price of Lm6.35, the equity is trading at 1.77 times its book value. Return on equity works out at 13.5% (2002: 13.9%) with return on assets at 1.7% (2002: 1.4%).
The directors have declared a final gross dividend of 24.6c per share. Together with the interim dividend of 10.8c paid in August 2003, total dividends for 2003 amount to 35.4c, 67% higher than the dividends distributed in 2002. The final dividend of 24.6c per share, net of 35% tax, will be payable to all shareholders on the Company’s register as at Wednesday 18 February 2004. As such, the equity begins trading XD as from 19 February. The net dividend is covered 2 times by profits.