It's 'business as usual' for HSBC Malta, CEO tells shareholders

In the wake of international reports that HSBC's global strategy would see the bank pull out of Malta, chief executive Andrew Beane has told Maltese shareholders the board of directors had no information that required a company announcement to be made

HSBC Malta CEO Andrew Beane (left) talking to minority shareholders at the bank's AGM
HSBC Malta CEO Andrew Beane (left) talking to minority shareholders at the bank's AGM

HSBC Malta continues to operate "business as usual", chief executive Andrew Beane told the bank's shareholders on Thursday as he reiterated it was not company policy to comment on "speculation".

Beane was referring to a report by Bloomberg, the international channel dedicated to business, that quoted sources saying that Malta and other small jurisdictions were among those from which HSBC will pull out in a global shake-up of operations. The Bloomberg was picked up by the Maltese media.

Addressing shareholders at the annual general meeting, Beane said that the HSBC Malta board had no information that required a company announcement to be made. In its last communication with the market, HSBC Malta described the media coverage as speculation, a line he reiterated at the AGM. "Recent media coverage is speculation on which the bank’s policy is not to comment," Beane said.

He added that the bank's focus was to move forward with the startegy approved by the board of directors in February to grow the business in Malta.

Beane gave an overview of HSBC's results for 2017, which were released last February.

The bank registered a profit of €49.8 million for 2017, a decrease of €12.4 million, or 19.9%, compared to the previous year. Earnings per share of 8.6 cents compared to 11.2 cents in 2016, were also down. 

The board approved a net dividend for 2017 of €40.2 million, up 54% over the previous year, which included a special dividend of €20 million to be distributed from surplus retained earnings.

The bank's capitalisation remained healthy, with common equity tier 1 ratio going up to 13.9% at the end of 2017, from 13.2% in 2016, and total capital ratio, hitting 14.4%, up from 14.2%. ‚ÄčThe loans to deposits liquidity ratio remained stable at 65.6%.

HSBC reported that loans and advances to customers stood at €3.1 billion, down 5.8% compared with 2016. Customer deposits decreased by 4.7% to €4.77 billion as at 31 December 2017. 

Beane said in 2017 the bank completed changes to its business model that were required to meet global standards for compliance and risk management. The higher costs of compliance, coupled with lower revenues from a low-interest environment, contributed to the reduced profitability during the year but Beane insisted the changes strengthened the bank’s risk profile and positioned it well for the future.

The AGM approved all resolutions put forward by the board.

The majority shareholder re-appointed Sonny Portelli as chairman of the board and Andrew Beane, Christopher Davies, Andrew Muscat, Tracy Garrad and Yiannos Michaelides as directors.

Minority shareholders will be represented on the board by John Bonello, economist Gordon Cordina and Sue Vella. The three were automatically elected as directors since no election was required.

Beane is the only director to also occupy an executive role.