HSBC Malta plc delivered a resilient performance in the first six months ended 30 June 2013 reporting a profit before tax of €53 million.
This, according to HSBC, was principally the result of strong balance sheet management, effective cost control and a good performance from the Life Business offset by the impact of lower interest margin earned.
During a news conference held at the Chamber of Commerce this afternoon, HSBC’s director and CEO Mark Watkinson said: “We have continued to deliver resilient results for our shareholders against a very challenging European backdrop.”
He added that although the global economy remains uncertain, particularly our neighbours in the eurozone, Malta’s economy is resilient.
He said Malta stood in an enviable position in the eurozone.
All the three main business lines, Retail Banking and Wealth Management, Commercial Banking and Global Banking and Markets, were profitable during the period under review.
Net interest income reduced by 6% to €63m compared with €68m in the first half of 2012. The fall in net interest income reflected the impact of lower yields as the loan portfolio re-priced in the low interest environment and lower average lending balances.
This was partially offset by a fall in the cost of funds resulting from a move by customers to more readily accessible, shorter-dated deposits. In addition, a lower level of interest income was earned on debt securities as the proceeds of higher yielding maturing bonds were re-invested at lower yields.
Net fee and commission income of €16m for the six months ended 30 June 2013 was in line with first half of 2012.
HSBC Life Assurance (Malta) Ltd reported a profit before tax of €8m compared with €7m in the first half of 2012 reflecting a release in with profits modelling reserves as a result of improved product performance.
Operating expenses at €45m were well controlled and broadly in line with the first half of 2012.
Net loans and advances to customers at €3,336m were only €18m lower than at 31 December 2012. In spite of a softening in loan demand the bank provided gross new lending to customers of €318m in the period, reflecting the bank’s continued support to the local economy.
Customer deposits declined by €70m to €4,447m reflecting the normal volatility of corporate and institutional deposits, this fall partially offset by higher levels of retail deposits achieved despite the heightened competition for deposits.
The bank’s available-for-sale investment portfolio remains well diversified and conservatively positioned.
The bank’s liquidity position remains strong with an advances-to-deposits ratio of 75% compared with 74% at 31 December 2012.
The bank continued to strengthen its capital ratio which was 12.9% at 30 June 2013, comfortably exceeding the 8% minimum regulatory capital requirement. The bank intends to maintain a conservative approach to capital and will continue to build its capital where considered appropriate.