HSBC Bank Malta has announced record results to the media and stockbroking community, with profits before tax of Lm33 million, up by a whopping 26.3 per cent over 2003.
It was also a good day for the Bank’s shareholders, who are to receive a final gross dividend of 27.3 cents per share, over and above the Bank’s interim dividend of 19.4 cents and a special dividend of 35.4 cents paid out in August to commemorate the fifth anniversary of HSBC in Malta. Officials speaking at the event remarked how the Bank’s equity price had leapt by 46 per cent last year alone and by over 212 per cent since the Mid-Med acquisition.
Perhaps of even more interest to shareholders was the announcement that the Bank’s board has recommended a share split, which has already been approved by the Malta Financial Services Authority and is still pending approval at the Bank’s upcoming Annual General Meeting. The move, which the Bank had undertaken back in 1999 when it had taken over Mid-Med Bank, is being taken in view of the substantial rise in the equity’s price and to bring HSBC shares within reach of the retail investor.
HSBC CEO Shaun Wallis comments, “2004 was a very active and successful year in terms of changes to strategy, structure and business development and led to record financial results, the establishment of a solid foundation on which to build for the future and a strong forward momentum across our sales force.”
Overall profit attributable to shareholders stood at Lm22.1 million following a tax deduction of Lm10.9 million. Net interest was up 13.8 per cent over 2003 and represented Lm39.5 million of the Bank’s total operating income. Non-interest income levels, meanwhile, rose by 6.8 per cent and accounted for Lm19.9 million of the Bank’s operating income.
In the area of human resources, the Bank has launched a number of performance-based compensation schemes, which have seen staff bonuses reaching a total of Lm1.22 million last year as opposed to the Lm400,000 forked out in bonuses in 2003.
Mortgage lending, figures of which are to be published in the near future in the Bank’s annual report, were up 21 per cent over last year. Commenting on Malta’s ever-rising property prices and on whether the Bank worries that the rise may be an artificial one, Mr Wallis emphasised that the Bank, when assessing the suitability of a home loan, takes into the consideration the borrower’s earning power and their ability to pay back the loan, and not the value of the property in question.
HSBC Malta also has wide-ranging plans for the commercial banking sector of its activities and plans to announce its 2005 strategy in this respect later this month.
The credit card sector is another area of future growth for the Bank. The Bank currently has 200,000 customers on its books and only 25 per cent hold credit cards. This compares with 75 per cent of its UK clientele, which also has a far higher credit activity rate.
Through its many charitable activities, Mr Wallis explains, the Bank has contributed some Lm550,000 in corporate social responsibility over the last five years.
In the same vein Mr Wallis adds, “The financial contribution to the country is also beneficial, with a tax charge to the Maltese government and total dividends to minority shareholders in 2004 exceeding the operating profit of the Bank in 1998 by more than Lm5 million.
“These are excellent results,” Mr Wallis continues. “We are also confident that there is good potential to continue to grow our business in 2005 and we will continue to focus on providing a comprehensive range of products to suit our customers’ needs, while at the same time maximising efficiencies.”