[WATCH] ‘It’s business as usual’ for HSBC Malta as company registers record profit

‘It’s business as usual’ for HSBC Malta as company registers record profit

Its majority shareholder is reviewing its stake in the company, but this did not stop HSBC Malta from reporting a record profit before tax in 2024.

According to its end-of-year financial results, HSBC Malta reported a profit before tax of €154.5 million for 2024, an increase of €20.6 million over the previous year.

The bank is recommending a gross dividend of 12c per share. When added to the interim dividend of 10c paid last September, this represents the highest disbursement in a decade.

The company’s strong capital generation enabled it to recommend a dividend pay-out ratio of 51% of the reported profits for 2024.

From left to right: CEO Geoffrey Fichte, Chairman Manfred Galdes and CFO Charlotte Cilia

During a press conference announcing the results, the company’s CEO Geoffrey Fichte said the shareholder’s strategic review is not affecting business.

“Customers are taking a mature, long-term view and we’re thankful for their ongoing support. It’s business as usual for HSBC Malta,” he said.

Manfred Galdes, the company chairman, said the majority shareholder “is still considering a full range of options, and no decisions have yet been made”.

The bank said the higher profits were driven by growth across all revenue lines but mainly due to the higher interest rate environment, increase in customer activity and higher insurance subsidiary results.

The effective tax rate was 35.2%, translating into a tax expense of €54.4 million, €7.3 million higher than the expense for 2023. The increase in tax expense resulted mainly from increased profits.

The bank said the credit quality of the loan portfolio continued to improve resulting in a significant release of expected credit losses. Operating costs increased on the back of investment in people, technology and real estate, the bank added.

The financial results released today show that customer deposits increased by €16.8 million to €6.2 billion by the end of December 2024, while net loans and advances to customers decreased by €210.7 million to €2.9 billion compared to 31 December 2023.

Customer deposits increased by €16.8m to €6,158m.  The increase in customer deposits was predominantly driven by an increase in retail deposits. While commercial deposits as at 31 December 2024 were at the same level as those reported a year earlier, the bank experienced an increase in the average level of commercial deposits held throughout the year.

The bank reported strong capital and liquidity ratios well above regulatory requirements.

The results come as HSBC Malta’s principle shareholder is in the process of selling off its stake in the Maltese subsidiary. HSBC has been in talks with APS Bank over a possible takeover.

Meanwhile, the financial results also show that HSBC Life Assurance (Malta) Ltd reported a profit before tax of €14.4m compared to a profit of €6.2m in 2023.