On 29 July, HSBC Bank Malta plc published its results covering the first six months of 2011. During the first half of 2011, the Bank registered a 5.7% increase in net interest income to €64.2 million and a further 37.9% increase in non-interest income to €32.6 million. During a meeting with the financial community, CEO Alan Richards explained that net interest income improved due to more effective management of the Balance Sheet whilst non-interest income was boosted by an upturn in trading profits for the first time since the adoption of the euro in 2008 as well as an improved performance from the Group’s life assurance subsidiary. The Group’s operating profit before impairments climbed by 25.3% to €54.6 million despite a €4 million loss on the sale of ‘available-for-sale’ investments as the Bank reduced its exposure to the higher risk Eurozone countries.
Operating costs increased by 4.1% to €42.5 million as the Bank continued to invest and expand its business. HSBC also incurred around €2 million in impairments on its loan book up from €1.4 million in the previous comparable period. The CEO explained that this is lower than expected and only represents 0.11% of gross loans. Nonetheless the quality of the lending portfolio showed a marginal deterioration with non-performing loans as a percentage of gross loans climbing from 3% in the first half of 2010 to 4% in the period under review. Furthermore, HSBC’s financial statements were adversely impacted by a further €2 million impairment on the value of higher risk debt securities held for sale.
Overall, the Bank reported a 19.3% increase in pre-tax profits to €50.4 million and a similar increase in net profit to €32.6 million after accounting for taxation. The growth in profitability was not reflected in the interim dividend as the Directors declared a gross interim dividend of €0.082 per share (net: €0.0533 per share) which only represents a 3.8% rise from last year’s interim dividend. Shareholders as at close of trading on 5 August will be entitled to this dividend which will subsequently be paid on 24 August.
Download a copy of the HSBC Bank Malta plc 2011 Half-Year Report