HSBC Malta said today it made a profit before tax of €62.2m for the year ended 31 December 2016, an increase of €15.4m, or 33%, compared with the previous year.
Adjusted profit before tax, which excludes the effect of non-recurring items, was €59.4m, 3% down on 2015 but in line with management expectations.
Net dividend for the year was €26.1m, up 45% compared with the prior year.
Common equity tier 1 ratio increased to 13.0% at 31 December 2016 from
12.3% at 31 December 2015. The total capital ratio was 14.0% at 31 December 2016, compared with 14.2% at 31 December 2015.
Earnings per share were 11.2 cents compared with 8.5 cents in 2015.
The advances to deposits liquidity ratio remained stable at 66%.
Net loans and advances to customers were €3,320m, up 1% compared with
2015.
Net interest income was down by 0.5% to €126.4m compared with 2015.
Customer deposits increased by 1% to €5,001m at 31 December 2016.
DIVIDEND
Together with the interim dividend paid in September 2016, the total gross dividend for the year will be 11.2 cents per share (7.3 cents per share net of tax), which represents a 45% increase compared to the 2015 dividend. The final dividend will be paid on 20 April 2017 to shareholders who are on the bank’s register of shareholders at 14 March 2017.
The bank said it had two ‘non-recurring’ items which were excluded from the adjusted results.
The first was a gain in disposal of the bank’s membership interest in Visa
Europe. During the first half of 2016 Visa Inc. completed the acquisition of Visa
Europe. As a result of this transaction, the bank received upfront cash consideration and preference shares. The total amount of income was €10.8m.
The second item was a provision of €8m set aside in relation to a legacy
operational and regulatory failure in the bank’s now-closed brokerage business.
"This sum reflects the estimated cost of ensuring that customers affected by this specific issue are not disadvantaged in line with HSBC’s commitment to the highest standards of conduct and fairness.
"The bank has self-identified and self-reported the issue to the regulator, Malta
Financial Services Authority. This issue relates to ‘execution only’ trades dealt in by customers purchasing complex instruments without the bank undertaking an
appropriateness test required by MiFID."
The bank said it will contact affected customers directly once final details of the resolution approach are agreed with the Malta Financial Services Authority at which point the final costs will be confirmed.
Andrew Beane, CEO, said the legacy charge dates back to an operational failure
that took place some 10 years ago.
"However, I believe that HSBC’s approach to self identify, self-report and remediate this issue demonstrates to our customers that HSBC is committed to the highest standards of conduct by doing what is right for our customers at all times."
Meanwhile the global HSBC Group today reported a slump in annual profits, falling well short of analysts' estimates.
Pre-tax profits dropping 62 per cent to US$7.1 billion in 2016.
Europe's biggest bank by assets blaming one-off charges in its global private banking business in Europe - and the impact of the sale of operations in Brazil.