HSBC announces strong half-yearly results

At a meeting held on Thursday, the board of directors of HSBC Bank Malta plc approved the group and bank interim accounts for the six months to 30 June.

During the first half of this year, the bank and its subsidiaries recorded a profit before tax of Lm20.6 million, which represents an increase of 11.3 per cent over the Lm18.5 million earned during the same period last year. Within this improved profit performance, HSBC's cost to income efficiency ratio improved from 47.5 per cent to 45.5 per cent.

Tax on profits was Lm7.1 million resulting in a net profit after tax of Lm13.4 million for the half year.

Total assets stood at Lm1,706 million representing a three per cent increase over December 31, 2005. Within that figure the customer focus of the bank's business improved as total loans and advances to customers increased by six per cent. Specifically, HSBC continued to see a significant increase in its market leading mortgage business, with home loans and equity release loans increasing to Lm371 million.

Total customer investments including savings, term deposits, funds, life policies and equities and bonds held under custody also saw an overall five per cent increase to Lm1,880 million.

Equity amounted to Lm123 million, producing an improved annualised pre-tax return on equity of 33.4 per cent (compared to 26.5 per cent last) and an annualised return on assets of 2.41 per cent, (2.27 per cent last year). The capital adequacy ratio was a healthy 10.9 per cent.

The board is recommending an interim gross dividend of 5.3 cents per share (3.4 cents net of tax). This represents a gross dividend yield of 4.5 per cent on the current share price of Lm2.35 and will be paid on August 17 to shareholders who are on the bank's register as at August 4. The dividend payment of Lm10.1 million is 75 per cent of current year earnings.

Shaun Wallis, director and CEO of HSBC Bank Malta plc, said: "Our strong results for the first six months reflect continued business growth in all customer groups and across all product lines. Our focus continues to be on maximising customer relationships and introducing new and competitive products and services to meet their financial needs and increase customer satisfaction.

"We would like to thank our customers for their business during the first six months of this year, to thank our staff for their professionalism and high level of customer service, and to thank the community and our shareholders for their support. We remain optimistic about economic activity in Malta and HSBC's business prospects for the remainder of the year."

During the first six months of 2006, HSBC also further increased its involvement in the Maltese community, particularly through its three local charitable funds, aimed at supporting Malta's children, the environment and Malta's heritage.

The HSBC Cares for Malta's Heritage Fund has been busy with major contributions going towards Patrimonju Malti's restoration of Palazzo Falson in Mdina and through various activities to support Heritage Malta, including the launch of the publication Malta's World Heritage Sites 360° and the hotel-heritage sponsorship scheme with Malta's leading hotels to raise funds to help Malta's heritage sites.

Major projects supported by HSBC Cares for the Environment Fund include the large afforestation programme at Xrobb l-Ghagin as well as Salina and the renewal of the sponsorship of the Xummiemu Waste Disposal Campaign.

The HSBC Cares for Children Fund (HCCF) has continued to support Church homes, special schools, schools in economically deprived areas, and other organisations, such as Appogg and Caritas who run specialist programmes for children.

HCCF has been very active in supporting Malta's youth through the whole age group with funding going towards Scoops, Junior Chamber International (Malta), Young Enterprise Malta and the  Kunsill Studenti Universitarji.

HSBC has been working on a 26-point Diversity Action Plan within the bank aimed at improving the development and promotion of equality across gender and people with disabilities and disadvantages. The bank now has 99 females in managerial grades, which represents a 12.5 per cent increase year on year.

However, HSBC recognises there is a need for more improvement and is actively working towards this. In this regard, the bank introduced a Childcare Subsidy Scheme to encourage and facilitate mothers who wish to return to work on a full or part-time basis.

HSBC Bank Malta noted that the HSBC Group Call Centre was on track to open in October, with dedicated premises now fully refurbished at a cost of around Lm600,000, IT and telecoms equipment and furniture ordered at a cost of around Lm850,000 are being installed and some 3,200 applicants for jobs currently being vetted, tested and interviewed for the 350 new full-time and part-time jobs, taking into account its diversity policy. Extensive HSBC global training is about to commence.