HSBC Bank Malta is "cautiously optimistic" there may be a return to modest economic growth this year, chief executive officer Alan Richards told The Times Business on Monday.
The bank this week announced a pre-tax profit of €71.2 million for the year ended December 31, 2009, down just under 26 per cent from 2008.
Mr Richards described 2009 as "difficult" and the bank's results for the year as "strong and very resilient" in view of the local economic climate. "2009 has been difficult for the bank and for many of our customers, who have had five negative quarters of GDP growth. We are taking that into account," he said, adding that HSBC Bank Malta was "in remarkably good shape".
"Looking ahead is difficult," he added. "What has happened recently in Greece, in particular, and Dubai at the end of the year are timely reminders that the economic recovery globally is at best fragile. We still have challenges ahead, but I am cautiously optimistic that we may see a return to modest economic growth during the course of 2010. We are all pleased to put 2009 behind us and we are looking forward to slightly more positive news in 2010." Asked about the bank's concerns over the potential crisis facing the euro, Mr Richards pointed out several issues had to be factored into the wider picture.
"One is the view as to how much of a sustainable recovery there is in the underlying economy, particularly as the government starts to reduce some of the public sector stimulus that has been driving part of the economic recovery," Mr Richards explained. "It also depends on the view as to whether or not this is a Greek problem or a broader eurozone problem, and that there are other countries where sovereign risk is also an issue. Finally, it also depends on the view of how deft and astute central banks, governments and finance ministers will be in managing any emerging crisis."
He added that management of improvement to the underlying economy as the government stimulus packages are slowly reduced was also a factor.
Mr Richards said there was "no specific plan at the moment" for HSBC Malta to come to the market to raise funds for capitalisation purposes.
"We are very well capitalised and well ahead of the regulatory minimum requirement," he said. "We always maintain a reasonably strong capital buffer, so there is no intention at this stage to raise any additional capital on the market."
At the presentation of the results at the Malta Chamber's Exchange Buildings in Valletta on Monday, HSBC Bank Malta plc announced a return on equity of 15 per cent.
New lending to customers amounted to €662.2 million, up by €114.2 million. Customer deposits increased by €70 million to €4.1 billion.
The board is declaring a final gross dividend of €0.08 per share, payable on April 20 to shareholders registered at March 4. Added to the gross interim ordinary dividend of €0.077 per share, the total gross dividend for the year is €0.157. Shareholders will receive a total €29.8 million in dividends for 2009.