HSBC Malta Q3 'satisfactory'

HSBC Bank Malta plc has described its third quarter performance as "satisfactory", with credit quality remaining good and core deposit levels marginally down.

In an interim directors' statement on the Malta Stock Exchange on Friday, HSBC said that while the bank has made good progress in improving revenue and reducing costs, performance continues to be adversely impacted by the difficult trading conditions.

Chief executive Alan Richards said he was "encouraged" by the bank's performance in the third quarter.

"There are signs that markets are stabilising but we are clearly not yet out of the woods and continue to monitor the situation closely. Let me stress that HSBC remains well capitalised, liquid and very much open for business, and we are doing all we can to support the local economy and our customers during these challenging times."

Margin compression remains an ongoing challenge and the period under review also saw a small increase in loan impairments as the consequences of the slowdown in the local economy impacted the lending portfolios.

"Although we have seen a slight softening in demand, customers' loans have performed well and the bank continues to provide responsible support for its customers, both depositors and borrowers. Credit quality has remained good while liquidity and capital ratios remain strong and are well above regulatory requirements. Levels of core deposits are marginally down in a period characterised by a number of bond issues and growing competitive pressures," the bank said.

The bank has maintained a strong liquidity position with a steady and stable loans-to-deposits ratio. The credit quality of the available-for-sale investments portfolio remains satisfactory and has improved over the reporting period.