HSBC Bank Malta plc - Full-Year Results

On 25 February 2026, HSBC Bank Malta plc published its Annual Report for the financial year ended 31 December 2025.

Net interest income dropped by 15% to €175 million (2024: €206 million) as the 14% (or €33 million) reduction in gross interest income to €199 million outweighed the 11% (or €2.8 million) decline in interest costs to €23.2 million.  The Bank explained that the results reflect the lower interest rate environment where the average prevailing rates in 2025 were lower than those recorded in 2024.

Excluding insurance operations, non-interest income remained at the €30.5 million level as the higher net fee income offset the reduction in net trading income.

Furthermore, HSBC Life Assurance (Malta) Limited reported a profit before tax of €8.1 million compared to €14.4 million in 2024. The reduction was driven by the one-off income of €6.1 million that was attributed to a re-assessment of a tax obligation estimate on the with-profit portfolio in 2024.

The Group’s net operating income before changes in expected credit losses (ECL) fell by 13% to €219 million compared to €253 million in the last financial year.

The financial performance also included the release of ECL’s amounting to €9.5 million, which however was lower than the release of €14.6 million in the previous year. HSBC Malta explained that the release of 2025 was across both the retail and commercial banking business lines.

On the expenditure side, operating costs rose by 6.33% to €120 million. These costs include a notable item of €3.1 million relating to the accelerated amortisation of software, following a revision to estimated useful lives in anticipation of the prospective transfer to CrediaBank.

Overall, HSBC Malta reported a profit before tax of €109 million, which is 29% lower than the pre-tax profit of €154 million generated in the previous year. After accounting for a tax charge of €37 million, the net profit for the year amounted to €71.6 million (equivalent to €0.1987 per share) which translates into a return on average equity of 11.7%.

The Statement of Financial Position as at 31 December 2025 showed that total assets increased by 5.3% (or €409 million) to €8.15 billion. Financial investments increased by 11% (or €246 million) to €2.54 billion and balances with the Central Bank of Malta, treasury bills and cash surged by 20% (or €219 million) to €1.29 billion. In contrast, customer loans dropped by 3.9% (or €111 million) to €2.76 billion.

On the liabilities side, customer deposits increased by 6% (or €370 million) to €6.53 billion. As a result of the contraction in customer loans and growth in deposits, the loans-to-deposits ratio dropped to a multi-year low of 42%.

Total equity increased by 4.1% to €626 million. This translates into a net asset value per share of €1.736 compared to €1.668 as at 31 December 2024. The bank’s capital ratios strengthened with the Common Equity Tier 1 capital ratio increasing to 24.1% (2024: 22.6%). Similarly, the Total Capital Ratio rose to 27.1% (2024: 25.6%). HSBC Malta noted that it continues to have a strong capital base and is fully compliant with regulatory capital requirements.

Dividend

The Board of Directors is recommending a final net dividend of €0.0546 per share. The dividend will be paid on 6 May 2026 to all shareholders as at close of trading on 26 March 2026 subject to approval by the Annual General Meeting scheduled for 29 April 2026.

Coupled with the net interim dividend of €0.065 per share paid in September 2025, the total net dividend attributable for the 2025 financial year amounts to €0.1196 per share (16% lower than the net dividend of €0.143 per share attributable to FY2024). The FY2025 dividend represents a payout ratio of 60% compared to 51.5% for FY2024.

Outlook

HSBC Malta’s CEO Mr Geoffrey Fichte stated that management remains focused on executing the Group’s strategy with discipline and clarity.

The Directors’ report noted that in December 2025, HSBC Malta’s parent company HSBC Continental Europe (‘HBCE’) and CrediaBank S.A. entered into a definitive agreement for the sale and purchase of HBCE’s majority shareholding in the bank. Furthermore, the bank, HBCE and CrediaBank have also entered into a cooperation agreement to govern their respective obligations in relation to the proposed transaction, which is still subject to the attainment of regulatory approvals. In this respect, the Directors reiterated their commitment to ensure a smooth and seamless transition.