HSBC Malta Prelim Profit Stmt

HSBC Holdings PLC
13 February 2004


The following is the text of an advertisement which is to be published in the
press in Malta on 14 February 2004 by HSBC Bank Malta p.l.c., a 70.03 per cent
indirectly-held subsidiary of HSBC Holdings plc.

HSBC Bank Malta p.l.c. Preliminary Profit Statement for the year ended 31
December 2003. (Published in terms of Section 6.05.06 (iii) of the Bye-Laws of
the Malta Stock Exchange.)
                                                 Group               Bank
                                            2003      2002      2003      2002
                                           Lm000     Lm000     Lm000     Lm000
Interest receivable and similar income    69,360    76,105    66,696    71,807
Interest payable                         (34,660)  (42,778)  (34,637)  (44,612)
Net interest income                       34,700    33,327    32,059    27,195
Other net operating income                18,668    18,282    14,859    14,004
Total operating income                    53,368    51,609    46,918    41,199
Operating expenses                       (30,290)  (28,588)  (29,524)  (27,265)
Amortisation of goodwill                    (291)     (291)     (205)     (205)
Operating profit before impairment
   releases/(losses) and provisions       22,787    22,730    17,189    13,729
Net impairment releases/(losses)           3,386    (1,515)    2,937    (1,960)
Provisions for liabilities and other
charges                                       (9)      (89)       (9)      (89)
Profit on ordinary activities 
   before tax                             26,164    21,126    20,117    11,680
Tax on profit on ordinary activities      (9,383)   (5,762)   (7,352)   (3,944)
Profit for the financial year 
attributable to shareholders              16,781    15,364    12,765     7,736

Earnings per share                          46.0c     42.1c     35.0c     21.2c

Dividends per share, net of income tax                          23.0c     13.8c

Exchange rates ruling on 31 December 2003
against the Maltese lira were as follows:     GBP1.6353   EUR2.3162   US$2.9196


                                                Group               Bank
Balance sheet extracts as at             31/12/03  31/12/02  31/12/03  31/12/02
(Figures in Lm millions)

Total assets                                1,539     1,570     1,491     1,535

Loans and advances to customers               923       891       813       763

Amounts owed to customers                   1,267     1,303     1,271     1,299

Shareholders' funds                           131       117       131       117

Review of group performance

HSBC Bank Malta p.l.c. and its subsidiaries recorded a profit before tax of
Lm26.2 million for the year ended 31 December 2003. This represents an increase
of 23.8 per cent over the Lm21.1 million earned in 2002. Profit after tax of
Lm16.8 million for the year ended 31 December 2003 represents an increase of 9.2
per cent over the Lm15.4 million earned in 2002. Earnings per share for the year
ended 31 December 2003 increased to 46.0 cents compared to 42.1 cents for 2002.

   • Net interest income of Lm34.7 million at 31 December 2003, up 4.1 per
     cent over prior year levels, in an environment characterised by low interest
     rates.
   • Non-interest income grew by 2.1 per cent, contributing Lm18.7 million to
     total operating income.
   • Operating expenses, up by 5.9 per cent influenced by a Lm1.9 million
     increase in termination benefits payable under the bank's voluntary early
     retirement scheme. The charge for retirement benefits is inclusive of Lm1.3
     million representing the net present value of benefits established in prior
     financial years. These amounts are not considered significant in respect of
     each respective year and accordingly comparative information has not been
     restated.
   • Net impairment losses. The reduction in net impairment losses totalled
     Lm3.4 million. An overall improvement in the credit quality of the lending
     book reduced non-performing loans from Lm120.3 million to Lm107.8 million.
     This contributed towards the reversing of Lm4.6 million in specific
     allowances together with a Lm2.6 million reduction in the level of general
     allowances held. Investment disposals contributed towards the reversing of a
     further Lm0.8 million in impairment allowances. New specific allowances of
     Lm3.3 million were raised and bad debt write-offs of Lm1.3 million were
     effected.
   • Customer deposits of Lm1.27 billion at 31 December 2003 compared with
     Lm1.30 billion at 31 December 2002. Collective investment schemes managed by
     the group and life assurance products grew by Lm82 million during the year.
   • Loans and advances to customers of Lm923 million at 31 December 2003 -
     up by Lm32 million or 3.6 per cent over 31 December 2002.
   • Total assets of Lm1.54 billion at 31 December 2003 compared with Lm1.57
     billion at 31 December 2002.

Chris Hothersall, Chief Executive Officer of HSBC Bank Malta p.l.c., said: "2003
was another challenging year for the bank operating within a local economy
gearing itself for EU membership. Despite this, the bank's financial results
display good progress. Capital and liquidity positions remain strong. The credit
quality of our loan portfolio remains sound.

"All our banking services continue to show good growth as we diversify into new
channels of distribution with the launch of our Personal Internet Banking
service and call centre initiatives. Demand for our wealth management investment
products has been strong and we have successfully expanded the product range.

"The Board has recommended a final gross dividend of 24.6 cents per share. The
total gross dividend for 2003 will amount to 35.4 cents per share, including the
interim gross dividend of 10.8 cents per share paid in August 2003 and
represents an increase of 14.2 cents over the previous year's level. The net
dividend is covered 2.0 times by attributable profit (2002: 3.1 times).

"In 2003, the bank was named 'Best Bank' in Malta by The Banker magazine. We
would like to thank our customers and shareholders for their support during the
year as well as our staff for their continued commitment to customer service,
which is reflected in these results."

The dividend, if approved at the next Annual General Meeting, will be paid to
shareholders who are on the Register of Members of the company on 18 February
2004.











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