HSBC Bank Malta plc, half-year results for 2004

23 July 2004

The following is the text of an advertisement which is to be published in the press in Malta on 24 July 2004 by HSBC Bank Malta plc, a 70.03 per cent indirectly-held subsidiary of HSBC Holdings plc.

Review of Performance

The published figures, which are in compliance with International Accounting Standard 34 Interim Financial Reporting, have been extracted from HSBC Bank Malta plc’s unaudited group management accounts for the six months ended 30 June 2004. These figures, which have been drawn up according to the accounting policies used in the preparation of the annual audited accounts, are being published in terms of chapters 8 and 9 of the Listing Rules of the Listing Authority – Malta Financial Services Authority.

HSBC Bank Malta plc and its subsidiaries recorded a profit before tax of Lm19.9 million for the six months ended 30 June 2004. This represents an increase of 56.5 per cent over the Lm12.7 million earned during the same period in 2003. Earnings per share for the six months ended 30 June 2004 increased to 36.2 cents compared to 23.2 cents for the first six months of 2003.

• Profit attributable to shareholders is Lm13.2 million, an increase of 56.3 per cent over the Lm8.5 million earned during the same period in 2003. 
• Net interest income, up by 10.4 per cent over prior year to Lm19.0 million. 
• Non-interest income levels grew by 15.5 per cent, contributing Lm10.8 million to total operating income. 
• Administrative expenses increased by 5.0 per cent, influenced by higher indirect taxes, new local regulatory fees, early voluntary retirement benefits and increased use of Group systems and processes. The cost to income ratio improved from 50.8 per cent to 47.8 per cent. 
• The net release in impairment provisions totalled Lm4.4 million. New specific provisions of Lm1.9 million were raised and bad debt write-offs of Lm2.1 million were effected. An overall improvement in the credit quality of the lending book reduced non-performing loans from Lm107.8 million to Lm90.5 million. This contributed towards the release of Lm8.6 million in specific provisions.  
• Customer deposits of Lm1,303.6 million at 30 June 2004 compared with Lm1,267.4 million at 31 December 2003. Collective investment schemes managed by the group grew by Lm11.6 million during the period. 
• Loans and advances to customers were Lm948.7 million at 30 June 2004 - up Lm26.2 million or 2.8 per cent over 31 December 2003.
• Total assets of Lm1.59 billion at 30 June 2004 compared with Lm1.54 billion at 31 December 2003.

Martin Wilkins, Director and Chief Operating Officer of HSBC Bank Malta plc, said: “Our results for the first six months are very encouraging. We are pleased to see solid growth in operating income lines and further improvement in our commercial loan book.

“We hope to see continued economic recovery, both locally and in the wider international markets which drive our business and income growth.

“Our focus for the second half of 2004 is to continue to improve the high quality of service we provide to our customers and to grow our core lines of business. This means allocating resources to those areas that offer the greatest opportunities for growth while developing our expense discipline and risk management.

“The Board has recommended a gross interim dividend of 19.4 cents per share and additionally a special dividend of 35.4 cents per share, giving a total gross interim dividend of 54.8 cents per share. This will be payable to shareholders who are on the Company’s register of shareholders as at 31 July 2004. The special dividend to shareholders marks the fifth anniversary of HSBC Bank Malta p.l.c. and the payment of Lm8.4 million that this represents is covered from current year earnings.

“We would like to thank our customers for their support during the first six months of this year and our staff for their continued high level of commitment to customer service, which is reflected in these results.”

The full text of the news release can be downloaded using the link on the right.

HSBC Bank Malta, a member of the HSBC Group, has more than 1,550 staff and 60 offices. With over 9,500 offices in 79 countries and territories and assets of US$1,034 billion at 31 December 2003, the HSBC Group is one of the world’s largest banking and financial services organisations. More information about HSBC Bank Malta and its products and services can be found on our website at hsbc.com.mt.