HSBC reports surge in profitability

The MSE Equity Price Index declined by 0.08% to 3,597.929 points as the declines in six equities outweighed the gain in IHI.  Meanwhile, BOV, MIA, HSBC, GO, and Lombard closed unchanged as total trading activity was muted at €0.12 million. Download today’s Equity Market Summary.

HSBC Bank Malta plc was today’s most actively traded equity as it closed unchanged at the €1.15 level after failing to hold to an intraday high of €1.20 (4.3%) across eleven deals totalling 33,799 shares. Today, HSBC issued an Interim Directors’ Statement updating the market on its performance during the nine-month period ended 30 September 2023. The Bank explained that pre-tax profits surged to €100.8 million compared to €32.9 million in the same period in 2022, following IFRS 17 restatement. HSBC explained that the increase in profitability was attributable to strong interest income, improved credit quality of the loan book, and continued focus on cost management. In fact, total revenues increased by 60% (or €64.2 million) driven by the higher net interest income generated from an improved interest rate environment. The financial performance was also boosted by a release of expected credit losses of €3.7 million reflecting the upgrade of facilities which were granted moratoria during the COVID-19 pandemic and a general improvement in the Maltese economy. HSBC also reported a €10 million drop in costs principally reflecting the higher level of costs attributed to the Depositor Compensation Scheme and restructuring provisions in 2022, as well as an insurance refund that was received in 2023.

Also in the banking sector, Bank of Valletta plc closed unchanged at the €1.25 level after recovering from an intraday low of €1.22 (-2.4%) across seven trades totalling 5,500 shares. Last week, BOV declared a net interim dividend of €0.03 per share, subject to regulatory approval. Shareholders of BOV as of the close of trading on Friday 17 November will be entitled to receive the dividend, payable on Wednesday 6 December.

Also among large companies by market value, Malta International Airport plc closed unchanged at the €5.40 level after failing to hold to an intraday high of €5.55 (2.8%) over four trades totalling 2,740 shares.

Lombard Bank Malta plc held the €0.755 level on a single deal of 7,033 shares.

A single trade of 850 shares left the price of GO plc unchanged at the €2.92 level.

APS Bank plc shed 0.9% to an all-time low of €0.57 across two trades totalling 3,808 shares. Yesterday, APS announced that the recent offer of up to €50 million 5.80% unsecured subordinated bonds 2028-33 will be oversubscribed based on preliminary indications received by the authorised intermediaries. As a result, the offer period which opened today was closed ahead of schedule at 15:00 hours. Last Thursday, APS published its financial results for the nine-month period ended 30 September in which the Group reported a record net profit for the period of €15 million.

MedservRegis plc slumped by 5.3% to a four-month low of €0.62 after partially recovering from an intraday low of €0.50 (-23.7%) over two deals totalling 4,600 shares. Medserv will be convening an Extraordinary General Meeting on Thursday 16 November 2023 to approve the reduction of the share premium account for the purpose of offsetting losses of the company.

Malita Investments plc moved 1% lower to the €0.51 level across three trades totalling 25,000 shares.

Also in the property sector, Malta Properties Company plc fell by 4% to a three-month low of €0.384 on a single trade of 7,000 shares.

Mapfre Middlesea plc declined by 2.4% to a multi-year low of €1.20 over four deals totalling 10,000 shares. Mapfre failed to hold to an intra-day high of €1.25 (+1.6%).

PG plc dropped by 5.4% to the €1.91 level on two trades totalling 5,000 shares.

International Hotel Investments plc was today’s only positive performing equity as it surged by 6.7% to an almost two-week high of €0.48 over three deals totalling 2,000 shares.

The RF MGS Index increased for the third consecutive session as it advanced by a further 0.55% to a two-week high of 854.434 points. Data published today showed that during October inflation in Germany was much lower than expected at just 3.0%, which is the lowest reported level in over two years. Meanwhile, the largest Euro Area economy only reported a marginal economic contraction during the third quarter of the year as analysts had previously expected a worse downturn.

This report contains public information only and is not to be construed as investment advice or an offer to buy or sell any securities. Information contained herein is based on data obtained from sources considered to be reliable, but no representations or guarantees are made with regard to the accuracy of the data. Stock markets are volatile and subject to fluctuations which cannot be reasonably foreseen. Past performance is not necessarily indicative of future results. Rizzo, Farrugia & Co. (Stockbrokers) Limited is a company licensed to undertake investment services in Malta by the MFSA under the Investment Services Act, Cap. 370 of the Laws of Malta and a member of the Malta Stock Exchange.