HSBC Bank Malta plc - Interim Directors’ Statement

On 21 May 2021, HSBC Bank Malta plc (‘HSBC’) published a Quarterly Update providing information about its performance in Q1 2021 when compared to the same period in 2020. In this respect, HSBC explained that net interest income decreased as a result of lower interest rates and subdued demand for lending but total revenues increased by €12 million mainly driven by positive market movements in the insurance business which boosted insurance revenues by €13.8 million.

On the expenditure side, operating expenses increased by €0.6 million when compared to Q1 2020 as the additional amount in operational cost savings were offset by higher deposit compensation scheme charges as a result of increased deposits held as at 31 December 2020. Expected credit losses remained largely unchanged from the levels as at the end of 2020 but were lower when compared to the level reported in Q1 2020.

Overall, HSBC reported a pre-tax profit of €9.9 million in the first three months of the year compared to the loss of €6.9 million in the same period last year.

In terms of financial position, HSBC explained that in the first three months of the year, net loans and advances to customers increased marginally by 0.2% to €3.27 billion (+€7 million) reflecting the prevailing uncertainties related to the pandemic. Similarly, customer deposits increased by 0.5% to €5.3 billion (+€27.0 million). The Bank also added that its liquidity position remained strong and regulatory capital ratios continued to exceed regulatory capital requirements.

Commenting on the results, HSBC Malta’s CEO Mr Simon Vaughan Johnson explained that: “Whilst we have seen an improvement in Q1 2021 results, mainly as a result of positive market movements and improved economic outlook, there remains a high degree of uncertainty as the country emerges from the pandemic. The continued economic uncertainty from the Covid-19 outbreak could adversely impact our growth during the year.”