HSBC posts Lm25.3m pre-tax profit in first half

HSBC Bank Malta recorded a profit before tax of Lm25.3 million ("58.9 million) during the first half of 2007, the bank's management announced at a press conference yesterday.

The profit represents an increase of 23.1 per cent over the Lm20.6 ("47.99) million earned during the same period in 2006.

HSBC chief executive officer and director Shaun Wallis said the bank's overall cost base was again flat and consequently the cost efficiency of the business improved from 45.5 per cent to 40.1 per cent.

Increases in loans and advances and customer deposits, together with improved margins, generated a 19.1 per cent increase in net interest income.

Sales of products and services, including insurance and brokerage, and trading profits resulted in an 8.4 per cent increase in revenues arising from these activities.

Tax on profits was Lm8.5 ("19.8) million resulting in a net profit after tax of Lm16.8 ("39.1) million for the half year.

Total assets stood at Lm2,031.4 ("4,731.9) million representing a 7.6 per cent increase over December 31, 2006. Within that figure total loans and advances to customers increased by 4.4 per cent.

The board declared an interim gross dividend of 6.6 cents per share (4.3 cents net of tax). The ordinary dividend payment of Lm12.5 million ("29.12 million) is 75 per cent of current profits attributable to the bank's circa 10,000 shareholders. Furthermore a special gross dividend of four cents will be paid also on August 22. Thus a total of Lm20.1 million ("46.82 million) will be distributed to shareholders who are on the bank's register as at August 8, 2007. Earnings per share when compared to 2006 will increase by 24.9 per cent.

"It is our policy to pay any surplus capital to shareholders. It is for this purpose that the bank continues to pursue a strong dividend policy, aiming to make HSBC Malta the best local company for shareholders," said Mr Wallis.

The CEO said HSBC was playing a major role in the euro changeover process as Malta converts to the euro on January 1, 2008, adding that all HSBC's key projects related to these events were on track.

The bank's strong results for the first six months reflected customer service excellence obtained through investment in refurbishing outlets to make HSBC the best place to bank, Mr Wallis said. Besides customer satisfaction, a survey indicated improved staff satisfaction.

Highlighting HSBC's role in Malta's economy, the CEO said HSBC Malta is today one of the biggest employers with some 1,500 full timers in the bank itself and over 250 full timers in its call centre with the number planned to increase to over 500 by December 2007.

The bank also claims to be the market leader in corporate social responsibility as it is forking out Lm250,000 this year to support children, the environment and Malta's heritage. A further Lm130,000 has already been given in support of charitable and philanthropic causes, NGOs, financial literacy projects and sporting events.