HSBC interim profits increase as ‘strategy gains momentum’

All three main business lines, Retail Banking and Wealth Management, Commercial Banking and Global Markets, continued to be profitable during the six-month period under review.

Andrew Beane, Director and Chief Executive Officer of HSBC Bank Malta p.l.c., said: “These are a good set of results as the bank emerges from implementation of its successful risk management strategy with increasing momentum. Strategically we are now focused on delivery of world-class customer service to support growth.

Progress in retail banking is ahead of expectations with significant market share gains achieved in new customer acquisition and home loans without increasing risk appetite. Retail Banking will also benefit from a number of digital innovations the bank will launch in the second half of the year.

Following completion of significant risk management actions, Commercial Banking has now stabilised and the performance of our Insurance company improved. Both of these divisions require further work to increase profitability and are a strategic focus for the Board. We have launched a quarter of a billion euro lending fund to signal to the market that our commercial division has returned to a growth focus.”

He added: “Progress on costs is encouraging and the bank is committed to further reduce its cost efficiency ratio over time. Additionally, HSBC’s signature credit discipline has delivered further reductions to the risk profile of our portfolio. While Malta’s economic performance and outlook remain positive, we are positioning the bank for the long-term economic cycle and remain cautious in growing exposure to higher risk sectors such as corporate real estate. We welcome actions being taken by the local authorities to reform corporate insolvency practices and augur this be completed at pace. The bank’s capacity to better use its capital to support lending into the economy and, if appropriate, higher dividends will significantly increase once these reforms are concluded.”

Concluding, Andrew Beane said: “Finally, as is the case with all Domestic Systemically Important Banks in the Single Supervisory Mechanism, HSBC is in early stage discussions with the European Central Bank Single Resolution Board to understand the requirements that will apply for new Required Eligible Liabilities, commonly known as MREL. MREL is likely to further increase capital requirements for the sector and the bank intends to provide more detail with the 2019 annual results as these requirements become clearer.”