HSBC Bank Malta 1H03 Results
HSBC Holdings PLC
25 July 2003
The following is the text of an advertisement which is to be published in the
press in Malta on 26 July 2003 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.
Half-Yearly Results for 2003
Review of Performance
The published figures, which are in compliance with International Accounting
Standard 34 Interim Financial Reporting, have been extracted from the HSBC Bank
Malta p.l.c.'s unaudited group management accounts for the six months ended 30
June 2003. These figures, which have been drawn up according to the accounting
policies used in the preparation of the annual audited accounts, are being
published in terms of section 6.05.06 (i) of the Malta Stock Exchange Bye-Laws.
HSBC Bank Malta p.l.c. and its subsidiaries recorded a profit on ordinary
activities before tax of Lm12.7 million for the six months ended 30 June 2003.
This represents an increase of Lm3.2 million, or 34.2 per cent, over the Lm9.5
million earned in the same period in 2002. Earnings per share increased to 23.2
cents compared to 19.3 cents for the same period last year.
* Profit attributable to shareholders of Lm8.5 million - up Lm1.4 million, or
20.4 per cent, over the same period in 2002.
* Net interest income of Lm17.2 million - up Lm1.3 million, or 8.1 per cent,
over 2002.
* Other operating income increased by Lm0.8 million as a result of operating
profit generated by life assurance business activity.
* Operating income of Lm26.6 million - up Lm2.4 million, or 9.7 per cent, over
2002.
* Operating expenses decreased by Lm0.1 million, or 1.1 per cent, on 2002 as a
result of improving our productivity.
* Net impairment losses were Lm0.2 million, a decrease of Lm0.7 million on 2002.
During the current period, Lm0.8 million in specific allowances against loan
losses and Lm0.7 million in write-offs were raised, offset by the releasing of
Lm1.3 million in general allowances against loan losses.
* A gross interim dividend of 10.8 cents per ordinary share - up from a previous
gross interim dividend payment of 8.0 cents.
* Loans and advances to customers were Lm901.0 million at 30 June 2003 - up
Lm10.3 million from a 31 December 2002 level of Lm890.7 million reflecting
growth across all personal customer segments. Customer deposits were Lm1,297.6
million at 30 June 2003, marginally down from Lm1,303.1 million as at 31
December 2002.
* Shareholders' funds increased by Lm7.2 million to Lm124.2 million. This
represents an increase of 6.1 per cent and includes the retention of Lm5.9
million on the profit and loss account and a Lm1.9 million increase in
revaluation reserves.
Chris Hothersall, Chief Executive Officer, said: "Our results for the first six
months are encouraging. Within the domestic economy, we view the six months
ahead with cautious optimism. Our operating revenues continue to grow and we
have improved our efficiency while the bank continues to invest in its
infrastructure and quality of customer service. Our key capital and liquidity
ratios remain strong. We are grateful for the support of our customers and the
commitment of our staff over this period. The directors have declared an interim
dividend of 10.8 cents per ordinary share payable to shareholders who are on the
Company's register of shareholders as at 31 July 2003. The total dividend of
Lm2.6 million represents a 35 per cent increase over the 2002 interim dividend."
Profit and Loss Account for the Period 1 January 2003 to 30 June 2003
Group Bank
6 mths to 6 mths to 6 mths to 6 mths to
30/6/03 30/6/02 30/6/03 30/6/02
Lm000 Lm000 Lm000 Lm000
Interest receivable and similar
income
- on loans and advances, balances
with
Central Bank of Malta and Treasury
Bills 30,403 28,897 28,350 26,413
- on debt and other fixed income
instruments 5,689 8,422 6,284 8,541
Interest payable (18,892) (21,412) (18,840) (22,475)
Net interest income 17,200 15,907 15,794 12,479
Fees and commissions receivable 5,233 4,809 4,388 3,844
Fees and commissions payable (291) (256) (273) (224)
Dividend income 68 28 68 28
Trading profits 2,861 2,976 2,847 2,718
Net (losses)/gains on disposal of
non-trading financial instruments (4) 8 8 8
Other operating income 1,516 760 8 10
Operating income 26,583 24,232 22,840 18,863
Administrative expenses (12,042) (12,274) (11,703) (11,603)
Depreciation (1,251) (1,294) (1,217) (1,247)
Net amortisation of goodwill (145) (146) (103) (103)
Other operating charges (214) (83) (212) (74)
Operating profit before impairment
losses and provisions 12,931 10,435 9,605 5,836
Net impairment losses (163) (900) (402) (972)
Provisions for contingent
liabilities
and other charges (50) (56) (50) (56)
Profit on ordinary activities
before
tax 12,718 9,479 9,153 4,808
Tax on profit on ordinary (4,264) (2,456) (3,074) (1,499)
activities
Profit for the financial period
attributable to shareholders 8,454 7,023 6,079 3,309
Earnings per share 23.2c 19.3c 16.7c 9.1c
Balance Sheet at 30 June 2003
Group Bank
30/6/03 31/12/02 30/6/03 31/12/02
Lm000 Lm000 Lm000 Lm000
Assets
Balances with Central Bank
of Malta,
Treasury Bills and cash 171,168 171,501 170,198 171,201
Cheques in course of 4,642 3,986 4,642 3,986
collection
Financial assets held for 2,228 2,779 2,228 2,779
trading
Investments 253,491 263,912 269,743 280,009
Loans and advances to 116,362 146,000 188,615 224,263
banks
Loans and advances to 900,995 890,664 781,934 762,952
customers
Shares in subsidiary - - 39,063 37,105
companies
Intangible fixed assets 485 630 291 394
Tangible fixed assets 29,401 28,965 29,244 28,786
Deferred tax asset 4,331 6,011 4,335 5,382
Other assets 46,981 37,627 1,325 902
Prepayments and accrued 17,284 18,258 15,996 17,545
income
Total assets 1,547,368 1,570,333 1,507,614 1,535,304
Liabilities
Financial liabilities held 6,631 6,402 6,631 6,402
for trading
Amounts owed to banks 28,822 64,563 28,822 66,304
Amounts owed to customers 1,297,635 1,303,140 1,298,917 1,298,726
Debt securities in issue 12 12 - -
Other liabilities 48,427 39,780 8,848 7,938
Accruals and deferred 16,892 17,848 16,547 17,474
income
Provisions for liabilities 4,759 1,591 4,492 1,637
and other charges
Subordinated liabilities 20,000 20,000 20,000 20,000
1,423,178 1,453,336 1,384,257 1,418,481
Shareholders' funds
Called up issued share 9,120 9,120 9,120 9,120
capital
Revaluation reserves 9,802 7,933 28,524 24,939
Other reserve 4,242 4,242 4,242 4,242
Profit and loss account 98,465 92,572 78,910 75,392
Dividend reserve 2,561 3,130 2,561 3,130
124,190 116,997 123,357 116,823
Total liabilities 1,547,368 1,570,333 1,507,614 1,535,304
Memorandum items
Contingent liabilities 41,028 47,634 41,448 48,054
Commitments 286,733 287,605 292,427 300,985
The financial statements were approved by the Board of Directors on 25 July 2003
and signed on its behalf by:
Albert Mizzi, Chairman Chris Hothersall, Chief Executive Officer
Statement of Changes in Equity for the Period 1 January 2003 to 30 June 2003
Group
Profit and
Share Revaluation Other Loss Dividend
capital reserves reserve account reserve Total
Lm000 Lm000 Lm000 Lm000 Lm000 Lm000
At 1 January 9,120 6,420 4,242 82,363 1,897 104,042
2002
Net fair value
adjustments
on
investments - 841 - - - 841
Transfer
between
reserves
on disposal of
property - 19 - (29) - (10)
Net gains/
(losses) not
recognised in
the profit
and loss
account - 860 - (29) - 831
Profit
attributable
to
shareholders - - - 7,023 - 7,023
Dividends - - - - (1,897) (1,897)
paid
Dividends - - - (1,897) 1,897 -
At 30 June 9,120 7,280 4,242 87,460 1,897 109,999
2002
At 1 January 9,120 7,933 4,242 92,572 3,130 116,997
2003
Net fair value
adjustments
on
investments - 1,869 - - - 1,869
Net gains not
recognised
in
the profit and
loss account - 1,869 - - - 1,869
Profit
attributable
to
shareholders - - - 8,454 - 8,454
Dividends - - - - (3,130) (3,130)
paid
Dividends - - - (2,561) 2,561 -
At 30 June 9,120 9,802 4,242 98,465 2,561 124,190
2003
Bank
Profit and
Share Revaluation Other loss Dividend
Capital reserves reserve account reserve Total
Lm000 Lm000 Lm000 Lm000 Lm000 Lm000
At 1 January 9,120 32,133 4,242 56,386 1,897 103,778
2002
Net fair value
adjustments
on
investments - 4,070 - - - 4,070
Transfer
between
reserves on
disposal of - 19 - (29) - (10)
property
Net gains/
(losses) not
recognised in
the profit
and
loss account - 4,089 - (29) - 4,060
Profit
attributable
to
shareholders - - - 3,309 - 3,309
Dividends - - - - (1,897) (1,897)
paid
Dividends - - - (1,897) 1,897 -
At 30 June 9,120 36,222 4,242 57,769 1,897 109,250
2002
At 1 January 9,120 24,939 4,242 75,392 3,130 116,823
2003
Net fair value
adjustments
on
investments - 3,585 - - - 3,585
Net gains not
recognised
in
the profit and
loss account - 3,585 - - - 3,585
Profit
attributable
to
shareholders - - - 6,079 - 6,079
Dividends - - - - (3,130) (3,130)
paid
Dividends - - - (2,561) 2,561 -
At 30 June 9,120 28,524 4,242 78,910 2,561 123,357
2003
Cash Flow Statement for the Period 1 January 2003 to 30 June 2003
Group Bank
6 mths to 6 mths to 6 mths to 6 mths to
30/6/03 30/6/02 30/6/03 30/6/02
Lm000 Lm000 Lm000 Lm000
Cash flows from
operating
activities
Interest and 38,908 40,342 35,936 37,297
commission
receipts
Interest and (19,557) (21,373) (19,467) (22,636)
commission paid
Payments to
employees and
suppliers (12,719) (11,938) (12,364) (11,423)
Operating profit
before changes
in operating assets/
liabilities 6,632 7,031 4,105 3,238
Movement in
operating assets:
Trading securities 91 3,344 91 3,344
Reserve deposits
with Central Bank
of Malta 9,425 (1,479) 9,414 (1,527)
Loans and advances 12,140 (8,736) 8,991 (8,556)
to banks
Loans and advances (10,494) 4,859 (19,384) (1,189)
to customers
Treasury bills with
contractual
maturity of over
three months 43,028 (13,526) 43,028 (13,543)
Cheques in course of (656) (2,809) (656) (2,789)
collection
Other receivables (10,397) (2,719) (423) 1,129
Movement in
operating
liabilities:
Amounts owed to (22,594) (28,014) (23,147) (27,560)
banks
Amounts owed to (930) 66,310 4,614 59,968
customers
Other payables 9,996 4,704 910 (2,274)
Net cash from
operating
activities
before income tax 36,241 28,965 27,543 10,241
Tax paid (353) (666) (152) (425)
Net cash from 35,888 28,299 27,391 9,816
operating
activities
Cash flows from
investing
activities
Dividends received 68 28 68 28
Interest received
from held-to
maturity debt and
other fixed
income instruments 4,934 8,830 6,112 8,747
Proceeds on disposal
of available-
for-sale 324 - 324 -
instruments
Proceeds on maturity
of held-to-
maturity debt and
other fixed
income instruments 40,553 56,080 38,679 46,972
Proceeds on disposal
of tangible
fixed assets 3 52 3 52
Purchase of
available-for-sale
instruments (519) (57) (10) -
Purchase of
held-to-maturity
debt
and other fixed (29,895) (57,484) (29,895) (57,484)
income instruments
Purchase of tangible (1,878) (1,897) (1,846) (1,871)
fixed assets
Net cash from/(used
in) investing
activities 13,590 5,552 13,435 (3,556)
Cash flows from
financing
activities
Dividends paid (3,130) (1,897) (3,130) (1,897)
Cash used in financing
activities (3,130) (1,897) (3,130) (1,897)
Increase in cash and
cash
equivalents 46,348 31,954 37,696 4,363
Effect of exchange
rate changes on
cash and cash
equivalents (2,790) 658 (2,738) (1,037)
Net increase in cash
and cash
equivalents 49,138 31,296 40,434 5,400
46,348 31,954 37,696 4,363
Cash and cash
equivalents at
beginning of period 127,156 107,130 203,965 131,234
Cash and cash
equivalents at end
of period 173,504 139,084 241,661 135,597
Segmental Information
a Class of business
Commercial Investment Other Group
Banking banking companies total
6 months 6 months 6 months 6 months 6 months 6 months 6 months 6 months
to 30/6/03 to 30/6/02 to 30/6/03 to)30/6/02 to 30/6/03 to 30/6/02 to 30/6/03 to 30/6/02
Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000
Profit before tax
Segment operating
income 24,291 22,910 813 630 1,479 692 26,583 24,232
Common costs (13,865) (14,753)
Profit on ordinary
activities before 12,718 9,479
tax
30/6/03 30/6/02 30/6/03 30/6/02 30/6/03 30/6/02 30/6/03 30/6/02
Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000
Assets
Segment total assets 1,488,448 1,473,162 7,069 7,422 51,851 31,520 1,547,368 1,512,104
Average total assets 1,505,889 1,446,963 6,988 7,245 45,974 29,980 1,558,851 1,484,188
Net assets 114,612 104,062 5,486 4,380 4,092 1,557 124,190 109,999
b Geographical segments
The group's activities are carried out within Malta. There are no identifiable geographical segments or other material
concentrations.
HSBC Bank Malta p.l.c. is licensed as a credit institution and provider of
investment services by the Malta Financial Services Authority.
Registered Office: 233, Republic Street, Valletta VLT 05, Malta. Telephone:
(00356) 2124 5281
Company Registration Number: C3177
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