Adds dividend information:
HSBC Bank Malta has reported a profit before tax of €71.2 million for the year ended 31 December 2009 - down €24.9 million, or 25.9 per cent, compared to €96.1 million in 2008.
Profit attributable to shareholders was down 27.3 per cent, or €17.2 million, to €45.9 million, compared with €63.1 million in 2008. Earnings per share for the year ended 31 December 2009 were 15.7 euro cent, compared with 21.6 euro cent for 2008.
Loans and advances to customers reached €3,226.5 million, up €114.2 million, or 3.7 per cent, compared with 31 December 2008.
Customer deposits reached €4,086.7 million, up €70.0 million, or 1.7 per cent, compared with 31 December 2008.
The bank said its total assets dropped to €5,117.8 million, down €178.3 million, or 3.4 per cent, compared with 31 December 2008.
Return on equity at the end of last year was of 15.0 per cent compared with 22.3 per cent in 2008. The capital adequacy ratio was 11.8 per cent compared with 11.0 per cent in 2008.
The bank said that while its performance showed a decline in profits, the profit of €71.2 million was achieved despite the exceptionally difficult economic environment in which it operated.
Alan Richards, director and chief executive officer of HSBC Bank Malta, said: “2009 has clearly been a challenging year for both the bank and its customers. It has been a year characterised by pressure on profitability as a consequence of a general slowdown in economic activity, continued low interest rates, which have resulted in significant margin compression, and ongoing volatility in equity and bond markets which have inevitably impacted our investment-related businesses.
“In spite of difficult market conditions, HSBC Bank Malta has continued to deliver strong results for its shareholders where profitability relative to history and peers remains attractive with a return on equity of 15.0 per cent.”
The fall in the bank’s net other operating income from €3.7 million in 2008 to €0.9 million in 2009 was mainly due to the non-recurrence of gains from property disposals and a revaluation gain on investment property of €3.5 million reported in 2008.
The bank said that in anticipation of revenue pressures, costs were tightly managed and operating expenses fell by €6.6 million, or 7.3 per cent, to €83.8 million in 2009. Employee compensation and benefits decreased by €6.2 million in 2009, from €55.5 million in 2008, primarily due to provisions made in 2008 for payments under voluntary early retirement schemes amounting to €5.6 million. General and administrative expenses were slightly lower at €27.1 million reflecting the bank’s focus on cost control.
In a challenging economic environment, loan impairments increased by €2.3 million to €4.2 million in 2009. This, the bank said, was from an extremely low historic base and remained at the modest level of 13 basis points of the overall loan book.
The Board is declaring a final gross dividend of 8.0 euro cent per share (5.2 euro cent net of tax). This will be paid on 20 April 2010 to shareholders who are on the bank’s register of shareholders at 4 March 2010. This, together with the gross interim ordinary dividend of 7.7 euro cent per share, results in a total gross dividend for the year of 15.7 euro cent.