HSBC Bank Malta plc - Interim Directors’ Statement

On 5 May 2026, HSBC Bank Malta plc published a quarterly update providing information about its performance in Q1 2026 when compared to the same period in 2025.

Total revenue decreased by 14% (or €8.1 million) reflecting the lower prevailing average interest rates in Q1 2026 when compared to Q1 2025 and lower net investment return from the insurance subsidiary due to significant market fluctuations. Nonetheless, the Directors highlighted that from an underlying business perspective, the insurance subsidiary reported higher gross written premium compared to Q1 2025. The Group also experienced strong sales growth across the retail and commercial businesses, as well as wealth management.

The financial performance was positively impacted by a release of expected credit losses (ECL) of €4.6 million compared to a charge of €0.6 million in Q1 2025. The release in Q1 2026 was mainly driven by a recovery on a long-outstanding non-performing corporate loan.

HSBC noted that costs increased by 12% (or €3.7 million) driven by higher salaries and employee benefits, legal provisions, as well as accelerated amortisation of intangible assets in view of the change in their estimated useful lives.

Overall, HSBC reported a profit before tax of €21.3 million, which is 24% lower than the €27.9 million figure reported in Q1 2025. The bank continued to hold a strong liquidity position and regulatory capital ratios that exceed regulatory requirements by significant margins.

The Bank explained that customer loans remained broadly in line with balances as at 31 December 2025 of around €2.76 billion. Loans to corporates were 4% higher than balances as at 31 December 2025. New loans to corporates approved in Q1 2026 were up 86% when compared to Q1 2025. Despite a slight decline in overall retail lending balances when compared to balances as at 31 December 2025, the Bank delivered 4% growth in mortgage sales and 41% growth in personal unsecured loan sales compared to Q1 2025.

Customer deposits decreased by €200m when compared to balances as at 31 December 2025 of €6.53 billion, reflecting mainly a decrease in corporate deposits due to seasonality. Deposits were, however, €120m higher than those reported as at 31 March 2025.

Commenting on the results, HSBC Malta’s CEO Mr Geoffrey Fichte noted that Malta’s strong economy is presenting many opportunities for growth. The CEO highlighted that progress was made on the transition to a new majority shareholder, CrediaBank, which is still subject to regulatory approval.

Dividend

In line with previous guidance relating to the declaration of quarterly dividends, the Directors declared a gross interim dividend of €0.036 (net: €0.0234) per share, representing a payout ratio of 60%. The interim dividend will be paid on 30 June 2026 to shareholders as at close of trading on Friday 15 May 2026.