HSBC in good shape despite crisis

Despite the economic crisis, HSBC remained in a remarkably good shape but falling revenue and lower profits were, for the time being, a reality, HSBC Malta chief executive officer Alan Richards told shareholders during their annual general meeting.

He said that in spite of difficult market conditions, HSBC Bank Malta continued to deliver strong results for its shareholders where profitability relative to history and peers remained attractive with a return on equity of 15 per cent and a cost-to-income ratio of 52.5 per cent.

The Bank’s Chief Financial Officer, David Demarco, provided a detailed analysis of the 2009 financial results, explaining cost and revenue trends and balance sheet performance.

In an overview for this year, Mr Richards said while there are clear signs that markets are stabilising internationally, the outlook for the Maltese economy and general impairment levels in 2010 remained challenging.

HSBC was, however, liquid, well capitalised and well-positioned to support future growth for customers and the local economy, he said.

In reply to questions from shareholders, HSBC reiterated that the Group was in a very strong position because of its financial strength and diversified business model.

Mr Richards explained that in the context of the current challenging circumstances, HSBC Malta continued to pay an attractive dividend ratio of 65 per cent of profit after tax without compromising a healthy level of capital investment to support future growth.

He said that while the bank monitored its operating costs regularly to ensure a sustainable cost to income ratio, it was also investing in reshaping its branch network and IT infrastructure to further improve customer service.