Record profits for HSBC

Pre-Tax profits of Lm33 million, up 26.3% on 2003; a proposed final gross dividend of 27.3c per share (19.4c in 2003); increased operating income of Lm59.4 million; and flat operating expenses. These were the highlights of the HSBC Bank Malta plc preliminary results for 2004 announced on Friday.

The HSBC Bank Malta board is to recommend a 'two for one' share split, following a substantial rise in the value of the bank's shares since it acquired Mid-Med Bank plc in 1999.

HSBC chief executive officer Shaun Wallis, briefing journalists and stockbrokers at the Chamber of Commerce and Enterprise, said: "2004 was a successful year. A new, clear strategy has produced record financial results, the share price has increased, there were stronger yields, a dividend increase and increased confidence of our clients."

The profit attributable to shareholders is Lm22.1 million, following the deduction of Lm10.9 million in tax. Net interest income grew by 13.8%, compared with 2003, and contributed Lm39.5 million to total operating income. Non-interest income levels grew by 6.8%, contributing Lm19.9 million to total operating income.

Administrative expenses stood at Lm27.4 million, a marginal increase of 0.3 per cent, or just Lm100,000. Depreciation was 3.9% higher as a result of the increased carrying costs of tangible fixed assets. The group's cost to income ratio improved to 51.1% from 56.8% in 2003, which is not far off from the HSBC international group benchmark of 50%.

" We are confident that there is good potential to continue to grow our business in 2005 and we will continue to focus on providing a comprehensive range of products and services to suit customers' needs, while at the same time maximising efficiencies," Mr Wallis said.

"The financial contribution to the country is also beneficial, with a tax charge to the Malta Government and total dividends to minority shareholders in 2004 exceeding the operating profit of the bank in 1998 by more than Lm5 million."

This he said was due to high earnings by individuals and big companies. Answering questions from the floor, he said a number of branches are to be relocated to more central positions but the bank had no plans to close any branches. All Mid-Med Bank representative offices overseas had been closed.

The home loan book has been sustained into 2005 with the average loan being taking out being in the region of Lm35,000.