HSBC reports annual profit of €88m
Net interest income improves by 5% to €129m, Customer accounts down by €60m
HSBC Malta has reported a profit before tax of €88m for the year ended 31 December 2011 – an increase of €5m, or 6%, compared with €83m in 2010.
It said that profit attributable to shareholders was of €58m, up €4m, or 7%, compared with €54m in 2010, resulting in earnings per share of 19.7 cent, up 7%.
Total assets reached €5,825m at 31 December 2011, up €174m, or 3%, compared with 31 December 2010.
Loans and advances to customers were €3,344m at 31 December 2011, an increase of €54m, or 2%, compared with 31 December 2010.
Customer accounts were €4,403m, a decrease of €60m, or 1%, compared with 31 December 2010.
The return on equity for the year ended 31 December 2011 was 15.7%, compared with 16.1% in 2010.
The cost efficiency ratio for the year ended 31 December 2011 was 50.4%, compared with 49.7% in 2010.
The Board of Directors resolved to recommend that the Annual General Meeting to be held on 18 April 2012 approves the payment of a final ordinary dividend of 7.2 cent gross per share (4.7 cent net per share). This will be paid on 27 April 2012 to shareholders who are on the company’s register of shareholders as at 19 March 2012.
REVIEW OF PERFORMANCE
HSBC said that on a like-for-like basis, excluding non-recurring items, profits were in line with the prior year’s performance.
The three main business lines, Retail Banking and Wealth Management, Commercial Banking and Global Banking and Markets all contributed positively to the bank’s overall performance.
During the year the bank continued to execute against its key transformation programme with a view to building long-term sustainability. In this light, and reflecting changing customer behaviour patterns, an announcement was made in relation to a branch optimisation programme and the launch of a staff voluntary retirement scheme.
In addition the bank disposed of its card acquiring business in line with HSBC Group global strategy for this business. The cost of the voluntary retirement scheme (€11m) was broadly offset by the proceeds from the sale of the card acquiring business.
The bank said it continued to invest in expanding its business and transforming its operations. A new banking computer system was introduced at a cost of €10m during the year and the roll-out of upgraded branches and ATMs at a cost of €11m continues.
Net interest income improved by 5% to €129m compared with €123m in 2010. The increase reflected growth in mortgage lending and improved balance sheet management.
Net fee and commission income of €34m in 2011 was marginally down on the prior year. Growth in account services fees were offset by a decline in stockbroking fees largely due to the slow-down in local capital markets bond issuance activity.
HSBC Life Insurance (Malta) Ltd generated a profit before tax of €11m compared to €13m in 2010. Underlying new business performance generation, particularly with respect to life insurance protection, was encouraging. The business benefited from a non-recurring gain of €7m as a result of a refinement in the methodology used to calculate the present value of in-force long-term insurance business. This benefit was eroded during the year as the yields on euro swaps continued to fall and the market value of investment holdings reduced.
In view of significantly heightened stress in the eurozone debt markets, the bank said it reduced its exposure to higher risk eurozone countries through selling holdings in the available-for-sale bond portfolio at a net loss of €2m.
Other than the exposures noted above and investments in Maltese government debt, the group has no exposure to southern European government debt.
HSBC said the group’s available-for-sale portfolio remains well diversified and conservative.
At a bank level, while there was a marginal deterioration in non-performing loans from 4% to 5%, in general asset quality remained good and loan impairments declined to €4m (11 basis points of the overall loan book) compared with €5m in 2010, HSBC said.
Mortgage market share remained stable. Gross new lending to customers amounted to €656m which, the bank said, reflected its continued support to the local economy.
Liabilities rose by €142m during the year and stood at €5,458m at the year end. The increase in liabilities reflected a rise in placements with the bank offsetting a the fall in customer deposits.
The bank said its liquidity position remained strong with advances to deposits ratio of 76%, compared with 74% at 31 December 2010.
The bank strengthened its capital ratio by 140 basis points to 11.6%. This exceeded the 8.0% minimum regulatory requirement.
Mark Watkinson, CEO, welcomed the results.
“The outlook for 2012 looks very challenging. While the Maltese economy has performed relatively well over the last 12 months the continuing uncertainty in the eurozone will likely act to slow the domestic economy," he said.
“That said HSBC Bank Malta remains confident in its abilities to rise to the challenges of the next 12 months."
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62 Comments
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Jonathan Camilleri
Feb 26th 2012, 06:40
Why did customer accounts fall?
Robert Agius
Feb 25th 2012, 11:11
i wish I could say that my interest at the end of the year, as a customer, was so profitable. Far from it! Look forward to returning there and cleaning my account out.
ALBERT FENECH
Feb 25th 2012, 07:19
Brushing aside the fact that Mid-Med Bank was undersold and made available to HSBC (we have now experienced many other family silvers being almost given away to foreign investors - including our own runway at the airport!), this profit is remarkably noteworthy and begs the question why therefore did HSBC have to close several branches - much to inconvenience of customers - including the thriving branch at Luqa? Had I been an account holder in one of these branches that closed down, I would have voted with my feet and marched off my account/s to another bank.
ALBERT FENECH
M. Attard
Feb 25th 2012, 05:55
Profit esagagerat mill-banek iffisser li l-klijent qed jerfa pizz mhux mehtieg u ta bla bzonn bil-barka tal-gvern. Il-Gvern malti kuntenti ghax jiehu taxxa diretta mill-Banek anke jekk dan ikun qed "jisraqhom" lil klijenti b'overcharging tas-servizz tal-Bank stess. Imma Malta qeghdin .... l-istess bhal l-airmalta ara kemm overcharged lil Klijenti taghha u issa l-Gvern jghinha mit-taxxa taghna stess. U l-istess ghamel ma l-enemalta u l-water services corporation, kontijiet bla razan u bla sens, l-aqwa li Gonzi kuntent.
Alfred Cassar
Feb 24th 2012, 21:25
Foreign Banks are taking tax money from their governments for bail-outs.
On the other hand local Banks are paying huge sums in tax to the government and other huge amounts to shareholders, the majority number of which are workers who had some foresight years ago to buy shares in Mid-Med Bank during a PN government with Du Puis as Finance Minister
And you are complaining?
Schembri Ray
Feb 24th 2012, 21:06
May I point out that there're many maltese shareholders who are receiveing an anual income.
m. borg (slm)
Feb 24th 2012, 20:14
Kemm konna ahjar meta konna ghar, Lohombus skemi li ta' c-cans iz-zaghzagh jixtru djarhom b'inqass spejjez possibli.
Interesi sahansitra ta' 1.5% , l-HSBC ghandha kuxxenza socjali biex tghin liz-zghir.
L-aqwa li issa tista tixtri it-tootpaste u c-cikulata li trid taht il-PN/gonzipn
john muscat
Feb 24th 2012, 19:35
At the time when Mid-Med Bank was given away for peanuts, somebody at that time told me that HSBC means Hadnieh f'Sieqna Bikhom Cwiec , or something to that effect. Now we lost 88m € to a foreign company.
m. borg (slm)
Feb 24th 2012, 20:17
Dear Mr Muscat €88 million just this year HSBC have been operating for over 10 years they have made a billion euros easily since starting operations and the Money No Problem Party made also billions of euros but in National debt.
I would agree with Tonio Fenech only once, it-takes cwiec maltin to put them back in government
Ramon Cassaro
Feb 24th 2012, 21:39
@ m.borg (slm),
You are 100% right. Trid tkun veru Cucc Malti biex tivvota lil xi hadd li wara li taghmlu SINJUR bil-VOT tieghek jajrek f`wiccek li tkun CUCC, daqshekk ivvotajt Jien,no more li nahli il-hin biex immur nivota.
mark borg
Feb 25th 2012, 09:10
u ma ninsewx il famuza frazi ta xi hadd li biehhulhom 10 miljun lira lhawn u ghaxar miljun lira l-hemm ma jghamlux differenza u din xi 10 snin ilu u liri Maltin !!!!!! MONEY NO PROBLEM BACK IN THOSE DAYS SUR DALLI HUX ??? Laktar xi 7miljuni go kumpannija falluta tal karozzi e TIFTAKRU MIL BANK TAL POPLU ??????
P. Attard
Feb 24th 2012, 19:25
What really interested me from this item is the fact that the bank had a decrease of 60 million Euros in clients' accounts; a good sign of silent protest by customers against the meagre rates of intrests which is offered by the bank!
Steve Sant
Feb 24th 2012, 18:51
HSBC in my opinion want to get out fast with a nice big profit. From the tell tale signs I think it will happen sooner than we imagine.
Simon Robinson
Feb 24th 2012, 18:21
88 million profit, and they close my branch!!!
D. A . Agius
Feb 24th 2012, 17:54
What some people may be missing, judging by the below comments, is that whilst the local investors and government will get a slice of these profits through taxes and dividends, the majority of this sum may actually be making its way out of this country.
So far, HSBC shareholders are lucky that the company is not doing like GO has done, that is dumping profits in a failed Greek company and local shareholders simply waiting for paltry dividends.
However, if one could calculate what is HSBC Europe B.V. (Main Shareholder at 70% of shares), share of the final profits after tax, this sums up to about 40Million Euros. That is money which is actually making its way out of the country. Bye Bye, probably not coming back.
40 Million out of the local economy, so not being spent on services locally, property purchasing, investment in businesses etc.
Whatever we sold the bank for 10 or so years ago, now it's all gone back out, and MORE! And if you forget where that profit came from in the first place, it actually comes from the charges and investments done on your custom.
If you want to see some more of that money to stay in Malta, switch to a bank that at least keeps most of its profits locally.
j brincat
Feb 24th 2012, 17:49
Sale of Mid Med Bank was one (amongst many others, like MIA) of the most foolish things the PN government ever did. And to think it was sold for a pittance?
Where are the other large banks which were supposed to flow in following the advent of HSBC to our shores? Wasn't HSBC supposed to be the the gateway for increased business with the Arab world? They recouped their capital outlay for purchase of Mid Med in just four years!
And how do they reciprocate? By closing branches every so often in accordance to their lean and mean Hong Kong culture!
(jb)
john vella
Feb 24th 2012, 17:46
These financial reports, only make us more humble of the state this country has become.
The rich mostly foreign owned companies get richer and take the profit out of the country and the poor Maltese get poorer.
D. A . Agius
Feb 24th 2012, 17:41
Well done HSBC. Thankfully, in this Financial Year, almost none of your profit will have been generated by me!
K Mizzi
Feb 24th 2012, 17:37
u dawn qed jaghlqu l branches ma Malta u Ghawdex kollha !!! Kemm iridu profit dawn mela?
j Azzopardi
Feb 24th 2012, 17:23
ahjar izidu l-kaxxiera mhux l-ahhar li mort bkara branch kien hemm kaxxier wiehed ghal bkara kollu ! dawn jafu jisthu jew ?
Clayton Silvio
Feb 24th 2012, 16:51
da zgur li jkompli jzid il-profitt, jien l-ewwel wiehed, ta' kuljum, minn 8 sieghat xoghol nahdem 3 ghall-Bank, 1 ghad-dar, 2 ghat-taxxa, u l-kumplament ghal-kontijiet u biex niekol (nghix).... Qliegh kbir koncentrat f-area wahda, bhal mhu fil-banek, huwa ta' periklu kbir, ghax ifisser li ghandek il-kumplament tas-setturi ekonomici li qeghdin ibaghtu, ovjament loans = inqas flus x'tonfoq. kieku minnflok il-gvern jigbor it-taxxa mil-profit ta' HSBC, johrog skema ta' loans u jigbor l-istess ammont m'ghand il-poplu, minn ghandi l-ewwel wiehed, kieku mhux talli ma jkunx qed imur minn taht, talli tinghata spinta l-ekonomija in generali, il-kwalita tal-hajja ta' kull indiviwu, u kull hanut u negozjant!
Alfred Cassar
Feb 24th 2012, 21:21
Clayton, jekk qed tahdem 3/8 ghall-Bank ifisser li qed thallas loan ftit kbir imma jigifieri li ghandek dar u qed thallas ghaliha le? Jigifieri dawk it-3 sighat qed tahdimhom ghal darek li meta tkun hallastha kollha tkin kollha kemm hi tieghek mhux tal-Bank. Le?
MARK MIFSUD BONNICI
Feb 24th 2012, 16:51
anyone recall what MID MED bank was sold for by a very enterprising Government?
P. Ciantar
Feb 24th 2012, 17:33
staqsi lil John Dalli u jghidlek kemm
Emma Xerri
Feb 24th 2012, 16:22
If you want to know how Banks and the financial system works and why we have national debt, please see this 5 part presentation:
http://www.youtube.com/watch?v=kerNZPC2fhM&feature=related
C Muscat
Feb 24th 2012, 16:10
is-70m huma lanqas haqq li kull ma hallsu tal-bini li hadu u issa b dan il-qliegh kollu u bdew inehhu l-branches u jwaqqfu n-nies....kieku kont jien li bieghejtu kieku nsib l-akbar mazra u mmur naqbez...naturalment jekk jaf jisthi...
M camilleri
Feb 24th 2012, 15:56
Bank are the real problem.......We must do something before it is to late.......
Michelle de Maria
Feb 24th 2012, 15:44
if only they invested a small fraction of that on Customer Care and on treating customers the way they should treat them i'm sure their profits would be much much higher
Tony Busuttil
Feb 24th 2012, 15:40
Shame on HSBC, all these profit and they squeeze the last drop from us
Sahame on Goverment €88 million lost from our purse
Jessica Williams
Feb 24th 2012, 15:38
Two questions:
"Branch optimisation programme" = closure of six branches eventually fifteen....where does this fit within HSBC's corporate social responsibility?
"staff voluntary retirement scheme" = I suppose this is the most humane technique to trim their workforce?
Anthony Arpa
Feb 24th 2012, 14:51
Sur Leonard Brincat
jien ma naqbilx mijak u ma hadd li jajd li il Maltin huma cwic hi. Li hawn hawn anzi il kuntrarju li xi uhud mil Maltin huma bravi hafna u imbruljuni u dejjem attennti u ghassa biex kif tigijhom l-ewwel opportunata dawn isiru miljunarji fi ftit zmien.
Dawn in nies ma jinpurthomx li jaghbu lil kumpaniji u azjendi li jkunu jmexxu bi djun kbar. Dawn jafu li wara kollox il haddiem u il baxx dejjem ikollu jaghmel tajjeb u sagrificji biex ihalsu iktar taxxi. Cwicc sew.
Joseph Cauchi Senior
Feb 24th 2012, 14:47
The more profits the bank makes, the more tax is paid to the Maltese Government.
The more tax the Maltese Government collects, the more BENEFITS the Maltese citizen enjoys.
So, let’s keep all our institutions and Banks continue making profits.
More profits, more tax collected!
JC.
Leonard Brincat
Feb 24th 2012, 15:02
Mela tista tghidli ghalfejn il gvern dejjem jiddejen la ghawn daqs dan gid u la skond int qed jigbor hafna taxxi
Emma Xerri
Feb 24th 2012, 15:20
Not necessarily. The banks are usually given bailouts. i.e. tax money. And because of 'Tax Cuts" or incentive to industry and other 'schemes', the richest Corporations in the world pay very little or no taxes at all while the average Joe has every last cent squeezed out from his paycheque.
Lawrence Fenech
Feb 24th 2012, 16:16
@Cauchi.
Dead right. Like 500 euros per week for the minisiters ( 1,000,000 euros so far) and pending for after the general elections compared to our 1 euro 16 cents. Less 40,000,000 euros struck off the budget in benefits.
Carmel Cilia
Feb 24th 2012, 16:45
Gus it 88 milljun min fuq il-Maltin ghamluhom qliegh dawn tafx. Aktarx min fuq in-nisa zaghzagh li ghadhom kif izzewgu u jahdmu biex ihallsu id-dejn ta fejn joqoghodu imsieken. Ara kieku ghadu tal gvern dawk it88 miljun iva imorru fil kaxxa biex jahlibhom ilgvern ghal poplu. Izda diek kienet uzanza socjalista li dejqet lil hafna nies. Issa hekk qeghdin tajjeb u viva ir Re la ixixitan irid hekk.
Raymond Sacco
Feb 24th 2012, 17:11
@Joseph Cauchi Senior:
Logic tells me that tax = a very small percentage of profit! Common sense tells me that Mid Med used to deliver all it's profit to the government for larger BENEFITS the Maltese citizen to enjoy! So, let's keep the banks enjoy their greed and profit u l poplu jigbor il loqom tat taxxi!
Jonathan Camilleri
Feb 26th 2012, 06:41
Well worded, Mr. Cauchi
Mr Joe Micallef
Feb 24th 2012, 14:24
Communists on a rampage!
vella m
Feb 24th 2012, 14:16
Banks! My newest swear word!!
Charles Massa
Feb 24th 2012, 14:09
@kKEVIN cAMILLERI
Ma naqbilx mal argument tieghek. Hu ezempju il Bank of Valletta li majority shareholding baqa tal gvern. Dan il bank xorta zid il profitti dawn l ahhar snin. Ghal hekk l argument tieghek ma jaghmilx sens
m. borg (slm)
Feb 24th 2012, 13:52
I'm speechless ....................
John Scerri
Feb 24th 2012, 13:50
daylight robbery !
Richard Caruana
Feb 24th 2012, 16:54
Yes, agreed, when Montoff took over the National Bank without paying a penny for it!
Vince Piscopo
Feb 24th 2012, 22:22
But repaid it back with the introduction of Mid Med Bank, numerous corporations, social welfare which very well contributed to sprout economic growth with 500 million pounds in reserves with all books in the GREEN unike today when a rampant deficit is progressively summing up due to incomptent management. Anyway as you expect from a feeble cabinet!
Mr Ernest Vella
Feb 24th 2012, 13:44
Ma nistax nifhem...jekk dahlu iktar flus kif imbaghad ir-rati ta imghax fuq investiment naqqsuh.
Jonathan Camilleri
Feb 26th 2012, 06:42
BIex jaghmlu iktar profitti hux
Leonard Brincat
Feb 24th 2012, 13:42
Is sena l-ohra ghamlu qliegh daqs in nofs li xtrawh. Jigifieri f'sentejn fdewh. Ghal darba forsi kellu ragun Tonio rigward ic CWIEC
Raymond Sacco
Feb 24th 2012, 13:41
Keep it up! The greedy banks keep increasing their profits while the average citizen is sweating to pay for their mess! And some idiots keep complaining cause mintoff took over the banks to finance the state!
Michael Seychell
Feb 24th 2012, 14:24
Mr Sacco after Mintoff took the Banks there were many who were given ';oans' withouit any collaterals and/or guiarantees, with the result that many became rich overnight whilst the banks were loosing money.
For those interested there is the Juidge Anastasi report on the Banks, as a resul;t of which certain people including Bank Directors and Managers left the country to avoid being propsecuted.
It may be added that a large number of Maltese including workers had bought shares in our two major banks and are today earning 7.2% when the b ank interest on deposits is around 1%.
This means that under Mintoff those who had friends of friends - including sonme thugs used to be given thousands of Maltese Liri abusively, whilst topday thousands of Maltese including wage earners are reaping high earnings on their shares.
Michael Seychell
Tal-Pieta
Raymond Sacco
Feb 24th 2012, 16:04
@Michael Seychell:
Banks losing money!?!?!? Every person living in Malta knows in which financial state BOV, Mid Med and every other state owned company were in when Mintoff left office! As for corruption, I am not that politically blind folded and naive to believe it did not exist, but what i also know is that thousands of low income citizens from both political beliefs were given free plots and very low interest loans to build thier homes. All you have to do to verify this is go for a drive around the housing estates and see for yourself who live there!
J Mangion
Feb 24th 2012, 13:27
Isn't that exactly the same price the present government sold the whole of Mid Med ( including property) to HSBC ! Vera good deal ghal poplu ! Return on investment.........................one year
Lawrence Fenech
Feb 24th 2012, 13:26
Why not close down a few more bravches so the profits can be bigger and make Dalli happy.
dieter bulten
Feb 24th 2012, 13:22
its nice to see the bank making more and more money each year. Pity these arent reflected in the interest rates we are given...HSBC... zut
j brincat
Feb 24th 2012, 13:21
Misers with no social conscience!
(jb)
Charles Massa
Feb 24th 2012, 13:12
Asset bhal dan u inbiegh bis soldi taht il PN. Kieku dawn il profitti baqu bi bwiet il Maltin. U tinsewx HSBC issa ghalaq partita branches
Kevin Camilleri
Feb 24th 2012, 13:45
MidMed Bank could never do the profits HSBC can. HSBC is an international bank hence their costs on a number of services must be much cheaper than those that are incurred by other small banks. When you are a big world wide bank, you have the expertise to conduct business, and expertise means huge profits.
Raymond Sacco
Feb 24th 2012, 16:16
@Kevin Camilleri:
Expertise? What expertise does one need to close down branches and sell the property? What expertise does one need to introduce charges for every little thing?
William Calleja
Feb 24th 2012, 13:06
"Dear employees, thank you for all th ehard work and dedication that you have showed to HSBC and it's many branches across the island. Through your hard work and dedication we are still showing a profit while the rest of the world sinks even deeper in debt. To conclude this statement, more than half of you are fired. Have a good economic depression." - The Management
Joe Diacono
Feb 24th 2012, 13:27
So right profit instead of customer relations At HSBC you now communicate with machines Banking should be a scenario of people doing business with people. However it seems that it's figures are what count.
Mark Frankalanza
Feb 24th 2012, 12:57
ALLA JBIEREK. Hsibthom ghaddejjin minn xi krizi msieken!!
Mario Borg
Feb 24th 2012, 12:54
Isn't it comforting to know that all the bank charges I incur go to a good cause.
Please choose the reason of your report below: