HSBC Malta's profit before tax for the six months ended 30 June 2022 was €23.5m, an increase of €6m from the same period in 2021.

"Higher profits reflect a significant recovery on a non-performing loan partially offset by an increase in regulatory fees as a result of the change in legislation regulating the Depositor Compensation Scheme," the bank said.

Non-funds income (fees and commissions and trading income) increased by €1.9m. Increased fees and commissions were mainly a result of higher credit card usage, account fees and growth in transaction banking revenues within the Commercial Banking business, including good progress made on foreign exchange income resulting in higher trading income. The growth in income from transaction banking is in line with the bank's 'safe growth' strategy

In the first half of 2022 HSBC recorded €69.1 million in revenue, the bank's interim results show. This was €2.4 million less when compared to the same period in 2021.

Moreover, costs have increased by €5.3 million (10%), from €52.1 million to €57.4 million.

A release of €11.8m was reported on Expected Credit Losses resulting in a positive variance of €13.7m compared to the first half of 2021. This release is mainly attributable to a recovery on a non-performing loan which was largely provided for in prior years.

During the first six months, deposits grew by €360.7m (6%) and loans to customers decreased marginally by €4.4m (0.1%).

The revenue analysis showed that there was lower insurance revenue in view of lower bond and equity prices, and a decrease in net interest income due to tight margins and higher liquidity, Chief Financial Officer of the Bank Charlotte Cilia said. Higher fees and trading income was recorded thanks to deepened customer relationships, she said.

There was a higher investment in property and systems, as well as a reduction in staff costs.

The wealth and personal banking sector of the expected credit losses relate to a partial release of Covid-19 overlays.

Cilia said that the bank continued to attract customer deposits, with the overall growth in customer deposits across both Retail and Commercial Banking.

There was a decrease in capital, which was driven by negative price movements on investment portfolio.

Despite the decrease in capital ratio, the ratio has remained a healthy one, well above regulatory requirements with 16.3%. Cilia said that no interim dividend was declared in view of market uncertainty.

The net interest income was still impacted negatively by negative rates in the first half of 2022, though there were improvements in rates in the month of July.

Chief Executive Officer of the bank Simon Vaughan Johnson said that the H1 2022 performance positively impacted by a significant recovery of a non-performing loan and favourable market conditions impacting the performance of insurance subsidiary.

He also said that there was good progress made on net fees and trading income. He said that capital was negatively impacted by negative price movements in investments.

Vaughan Johnson said that no interim dividend was recommended due to macro-economic and geo-political uncertainty. The bank will continue to engage with customers and operate in a sustainable, climate-aware fashion to reach a net zero on emissions.

The bank is also positive about the fact that Malta was removed from the FATF grey list and will continue to maintain robust controls and monitor the situation closely.