HSBC Bk Malta 2004 Int Rslts

HSBC Holdings PLC 23 July 2004 The following is the text of an advertisement which is to be published in the press in Malta on 24 July 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. Half-Yearly Results for 2004 Review of Performance The published figures, which are in compliance with International Accounting Standard 34 Interim Financial Reporting, have been extracted from HSBC Bank Malta p.l.c.'s unaudited group management accounts for the six months ended 30 June 2004. 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 chapters 8 and 9 of the Listing Rules of the Listing Authority - Malta Financial Services Authority. HSBC Bank Malta p.l.c. and its subsidiaries recorded a profit before tax of Lm19.9 million for the six months ended 30 June 2004. This represents an increase of 56.5 per cent over the Lm12.7 million earned during the same period in 2003. Earnings per share for the six months ended 30 June 2004 increased to 36.2 cents compared to 23.2 cents for the first six months of 2003. •Profit attributable to shareholders is Lm13.2 million, an increase of 56.3 per cent over the Lm8.5 million earned during the same period in 2003. •Net interest income, up by 10.4 per cent over prior year to Lm19.0 million. •Non-interest income levels grew by 15.5 per cent, contributing Lm10.8 million to total operating income. •Administrative expenses increased by 5.0 per cent, influenced by higher indirect taxes, new local regulatory fees, early voluntary retirement benefits and increased use of Group systems and processes. The cost to income ratio improved from 50.8 per cent to 47.8 per cent. •The net release in impairment provisions totalled Lm4.4 million. New specific provisions of Lm1.9 million were raised and bad debt write-offs of Lm2.1 million were effected. An overall improvement in the credit quality of the lending book reduced non-performing loans from Lm107.8 million to Lm90.5 million. This contributed towards the release of Lm8.6 million in specific provisions. •Customer deposits of Lm1,303.6 million at 30 June 2004 compared with Lm1,267.4 million at 31 December 2003. Collective investment schemes managed by the group grew by Lm11.6 million during the period. •Loans and advances to customers were Lm948.7 million at 30 June 2004 - up Lm26.2 million or 2.8 per cent over 31 December 2003. •Total assets of Lm1.59 billion at 30 June 2004 compared with Lm1.54 billion at 31 December 2003. Martin Wilkins, Director and Chief Operating Officer of HSBC Bank Malta p.l.c., said: "Our results for the first six months are very encouraging. We are pleased to see solid growth in operating income lines and further improvement in our commercial loan book. "We hope to see continued economic recovery, both locally and in the wider international markets which drive our business and income growth. "Our focus for the second half of 2004 is to continue to improve the high quality of service we provide to our customers and to grow our core lines of business. This means allocating resources to those areas that offer the greatest opportunities for growth while developing our expense discipline and risk management. "The Board has recommended a gross interim dividend of 19.4 cents per share and additionally a special dividend of 35.4 cents per share, giving a total gross interim dividend of 54.8 cents per share. This will be payable to shareholders who are on the Company's register of shareholders as at 31 July 2004. The special dividend to shareholders marks the fifth anniversary of HSBC Bank Malta p.l.c. and the payment of Lm8.4 million that this represents is covered from current year earnings. "We would like to thank our customers for their support during the first six months of this year and our staff for their continued high level of commitment to customer service, which is reflected in these results." HSBC Bank Malta, a member of the HSBC Group, has more than 1,550 staff and 60 offices. With over 9,500 offices in 79 countries and territories and assets of US$1,034 billion at 31 December 2003, the HSBC Group is one of the world's largest banking and financial services organisations. More information about HSBC Bank Malta and its products and services can be found on our website at hsbc.com.mt. Profit and Loss Account for the period 1Jan04 to 30Jun04 Group Bank 6 mths to 6 mths to 6 mths to 6 mths to 30/6/04 30/6/03 30/6/04 30/6/03 Lm000 Lm000 Lm000 Lm000 Interest receivable and similar income - on loans and advances, balances with Central Bank of Malta and Treasury Bills 27,770 30,403 26,004 28,350 - on debt and other fixed income instruments 5,081 5,689 5,785 6,284 Interest payable (13,857) (18,892) (13,952) (18,840) Net interest income 18,994 17,200 17,837 15,794 Fees and commissions receivable 5,491 5,233 4,306 4,388 Fees and commissions payable (319) (291) (279) (273) Dividend income 42 68 2,042 68 Trading profits 2,968 2,861 2,974 2,847 Net gains/(losses) on disposal of non-trading financial instruments 1,749 (4) 1,018 8 Other operating income 907 1,516 56 8 Operating income 29,832 26,583 27,954 22,840 Administrative expenses (12,873) (12,256) (12,518) (11,915) Depreciation (1,377) (1,251) (1,345) (1,217) Amortisation of goodwill (145) (145) (103) (103) Operating profit before provisions for impairments, contingent liabilities and other charges 15,437 12,931 13,988 9,605 Net release/(charge) for impairment provisions 4,432 (163) 4,431 (402) Net release/(charge)for contingent liabilities and other charges 36 (50) 36 (50) Profit on ordinary activities before tax 19,905 12,718 18,455 9,153 Tax on profit on ordinary activities (6,694) (4,264) (6,484) (3,074) Profit for the financial period attributable to shareholders 13,211 8,454 11,971 6,079 Earnings per share 36.2c 23.2c 32.8c 16.7c Balance Sheet at 30Jun04 Group Bank 30/6/04 31/12/03 30/6/04 31/12/03 Lm000 Lm000 Lm000 Lm000 Assets Balances with Central Bank of Malta, Treasury Bills and cash 144,114 133,574 144,047 133,512 Cheques in course of collection 5,958 5,637 5,958 5,637 Financial assets held for trading 1,849 2,444 1,849 2,444 Investments 246,745 235,059 270,895 256,191 Loans and advances to banks 126,206 130,700 175,028 187,945 Loans and advances to customers 948,685 922,526 848,719 813,101 Shares in subsidiary companies - - 41,817 41,602 Intangible fixed assets 194 339 86 189 Tangible fixed assets 30,955 31,934 30,839 31,797 Net deferred tax - 1,607 - 2,195 Other assets 67,961 59,102 1,231 1,246 Prepayments and accrued income 16,905 16,062 15,384 15,432 Total assets 1,589,572 1,538,984 1,535,853 1,491,291 Liabilities Financial liabilities held for trading 4,965 8,611 4,965 8,611 Amounts owed to banks 34,814 32,367 34,814 32,368 Amounts owed to customers 1,303,640 1,267,378 1,311,295 1,271,058 Debt securities in issue 12 12 - - Net deferred tax 1,341 - 288 - Other liabilities 69,478 62,080 10,099 11,032 Accruals and deferred income 13,738 15,676 13,420 15,419 Provisions for liabilities and other charges 4,147 1,698 3,977 1,746 Subordinated liabilities 20,000 20,000 20,000 20,000 1,452,135 1,407,822 1,398,858 1,360,234 Shareholders'funds Called up share capital 9,120 9,120 9,120 9,120 Revaluation reserves 9,875 10,978 31,869 32,069 Other reserve 4,242 4,242 4,242 4,242 Profit and loss account 101,206 100,989 78,770 79,793 Dividend reserve 12,994 5,833 12,994 5,833 137,437 131,162 136,995 131,057 Total liabilities 1,589,572 1,538,984 1,535,853 1,491,291 Memorandum items Contingent liabilities 46,806 38,818 47,226 39,238 Commitments 320,159 297,631 328,104 315,397 The financial statements were approved by the Board of Directors on 22 July 2004 and signed on its behalf by: Albert Mizzi, Chairman Martin Wilkins, Director and Chief Operating Officer Statement of Changes in Equity for the period 1Jan04 to 30Jun04 Group ----- Profit and Share Revaluation Other loss Dividend capital reserves reserve account reserve Total Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 At 1Jan03 9,120 7,933 4,242 92,572 3,130 116,997 Net fair value adjustments on investments not recognised in the profit and loss account - 1,869 - - - 1,869 Profit attributable to shareholders - - - 8,454 - 8,454 Dividend paid - - - - (3,130) (3,130) Interim dividend - - - (2,561) 2,561 - At 30Jun03 9,120 9,802 4,242 98,465 2,561 124,190 At 1Jan04 9,120 10,978 4,242 100,989 5,833 131,162 Net fair value adjustments on investments not recognised in the profit and loss account - 453 - - - 453 Release of net gains on available-for- sale assets transferred to the profit and loss account on disposal - (1,556) - - - (1,556) Profit attributable to shareholders - - - 13,211 - 13,211 Dividend paid - - - - (5,833) (5,833) Interim dividends - - - (12,994) 12,994 - At 30Jun04 9,120 9,875 4,242 101,206 12,994 137,437 Bank ----- Profit and Share Revaluation Other loss Dividend capital reserves reserve account reserve Total Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 At 1Jan03 9,120 24,939 4,242 75,392 3,130 116,823 Net fair value adjustments on investments not recognised in the profit and loss account - 3,585 - - - 3,585 Profit attributable to shareholders - - - 6,079 - 6,079 Dividend paid - - - - (3,130) (3,130) Interim dividend - - - (2,561) 2,561 - At 30Jun03 9,120 28,524 4,242 78,910 2,561 123,357 At 1Jan04 9,120 32,069 4,242 79,793 5,833 131,057 Net fair value adjustments on investments not recognised in the profit and loss account - 662 - - - 662 Release of net gains on available-for- sale assets transferred to the profit and loss account on disposal - (862) - - - (862) Profit attributable to shareholders - - - 11,971 - 11,971 Dividend paid - - - - (5,833) (5,833) Interim dividends - - - (12,994) 12,994 - At 30Jun04 9,120 31,869 4,242 78,770 12,994 136,995 Cash Flow Statement for the period 1Jan04 to 30Jun04 Group Bank ----- ---- 6 mths to 6 mths to 6 mths to 6 mths to 30/6/04 30/6/03 30/6/04 30/6/03 Lm000 Lm000 Lm000 Lm000 Cash flows from operating activities Interest and commission receipts 35,024 38,908 31,331 35,936 Interest and commission payments (15,160) (19,557) (15,148) (19,467) Payments to employees and suppliers (13,924) (12,719) (13,696) (12,364) Operating profit before changes in operating assets/ liabilities 5,940 6,632 2,487 4,105 (Increase)/decrease in operating assets: Trading instruments (181) 91 (181) 91 Reserve deposits with Central Bank of Malta (964) 9,425 (968) 9,414 Loans and advances to banks 2,128 12,140 3,405 8,991 Loans and advances to customers (21,728) (10,494) (31,187) (19,384) Treasury Bills with contractual maturity of over three months (7,951) 43,028 (7,952) 43,028 Cheques in course of collection (321) (656) (321) (656) Other receivables (8,641) (10,397) 15 (423) Increase/(decrease) in operating liabilities: Amounts owed to banks 5,769 (22,594) 5,768 (23,147) Amounts owed to customers 29,264 (930) 33,239 4,614 Other payables 7,398 9,996 (933) 910 Net cash from operating activities before income tax 10,713 36,241 3,372 27,543 Tax paid (1,298) (353) (1,072) (152) Net cash from operating activities 9,415 35,888 2,300 27,391 Cash flows from investing activities Dividends received 28 68 1,328 68 Interest received from available-for-sale debt and other fixed income instruments 2,625 2,415 2,625 2,415 Interest received from held-to- maturity debt and other fixed income instruments 3,344 2,519 4,703 3,697 Proceeds on disposal of available-for-sale instruments 10,640 324 5,126 324 Proceeds on maturity /disposal of held-to- maturity debt and other fixed income instruments 35,630 40,553 35,630 38,679 Proceeds on disposal of tangible fixed assets 17 3 17 3 Purchase of available-for- sale instruments (2,793) (519) - (10) Purchase of held-to-maturity debt and other fixed income instruments (51,298) (29,895) (51,298) (29,895) Purchase of tangible fixed assets (429) (1,878) (407) (1,846) Net cash (used in)/from investing activities (2,236) 13,590 (2,276) 13,435 Cash flows from financing activities Dividends paid (5,833) (3,130) (5,833) (3,130) Cash used in financing activities (5,833) (3,130) (5,833) (3,130) Increase/(decrease) in cash and cash equivalents 1,346 46,348 (5,809) 37,696 Effect of exchange rate changes on cash and cash equivalents 758 (2,790) 541 (2,738) Net increase/ (decrease) in cash and cash equivalents 588 49,138 (6,350) 40,434 1,346 46,348 (5,809) 37,696 Cash and cash equivalents at beginning of period 108,019 127,156 165,217 203,965 Cash and cash equivalents at end of period 109,365 173,504 159,408 241,661 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 to to to to to to to 30/6/04 30/6/03 30/6/04 30/6/03 30/6/04 30/6/03 30/6/04 30/6/03 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Profit before tax Segment operating income 27,117 24,291 1,869 813 846 1,479 29,832 26,583 Common costs (9,927) (13,865) Profit on ordinary activities before tax 19,905 12,718 30/6/04 30/6/03 30/6/04 30/6/03 30/6/04 30/6/03 30/6/04 30/6/03 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Assets Segment total assets 1,515,169 1,488,448 1,498 7,069 72,905 51,851 1,589,572 1,547,368 Average total assets 1,492,843 1,505,889 4,280 6,988 67,155 45,974 1,564,278 1,558,851 Net assets 125,931 114,612 6,596 5,486 4,910 4,092 137,437 124,190 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) 2597 0000 Company Registration Number: C3177 This information is provided by RNS The company news service from the London Stock Exchange

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