HSBC Malta Interim Results

HSBC Holdings PLC 25 July 2002 The following is the text of an advertisement which is being issued locally by HSBC's subsidiary. HSBC Bank Malta plc - Half-Yearly Results for 2002 Profit and Loss Account for the period 1 January 2002 to 30 June 2002 Group Bank 6 mths to 6 mths to 6 mths to 6 mths to 30/6/02 30/6/01 30/6/02 30/6/01 Lm000 Lm000 Lm000 Lm000 Interest receivable and similar income - on loans and advances, balances with Central Bank of Malta and Treasury Bills 28,897 31,615 26,413 28,803 - on debt and other fixed income instruments 8,422 9,527 8,541 9,274 Interest payable (21,412) (26,970) (22,475) (27,011) Net interest income 15,907 14,172 12,479 11,066 Fees and commissions receivable 4,809 4,547 3,844 3,408 Fees and commissions payable (256) (233) (224) (198) Dividend income 28 72 28 72 Trading profits 2,976 3,644 2,718 3,420 Net gains on disposal of non-trading financial instruments 8 44 8 - Other operating income 760 58 10 - Operating income 24,232 22,304 18,863 17,768 Administrative expenses (12,274) (13,111) (11,603) (12,331) Depreciation (1,294) (1,269) (1,247) (1,222) Net amortisation of goodwill (146) (146) (103) (103) Other operating charges (83) (96) (74) (86) Operating profit before impairment losses and provisions 10,435 7,682 5,836 4,026 Net impairment losses (900) (492) (972) (366) Provisions for contingent liabilities and other charges (56) - (56) - Profit on ordinary activities before tax 9,479 7,190 4,808 3,660 Tax on profit on ordinary activities (2,456) (1,883) (1,499) (1,102) Profit for the financial period attributable to shareholders 7,023 5,307 3,309 2,558 Earnings per share 19.3c 14.5c 9.1c 7.0c Exchange rates ruling on 30 June 2002 against the Maltese Lira were as follows: GBP1.5534, EUR2.3921, USD2.3839. Balance Sheet at 30 June 2002 Group Bank 30/6/02 31/12/01 30/6/02 31/12/01 Lm000 Lm000 Lm000 Lm000 Assets Balances with Central Bank of Malta, Treasury Bills and cash 111,244 119,862 110,671 119,049 Financial assets held for trading 2,317 5,580 2,317 5,580 Investments 293,540 295,524 288,158 277,443 Loans and advances to banks 147,895 76,523 236,156 173,121 Loans and advances to customers 872,671 878,329 733,062 732,745 Shares in subsidiary companies - - 49,982 46,669 Intangible fixed assets 775 921 496 599 Tangible fixed assets 27,246 26,688 27,053 26,458 Deferred tax asset 6,130 6,705 5,085 5,385 Other assets 31,958 26,332 1,036 3,005 Prepayments and accrued income 18,328 19,807 16,602 18,714 Total assets 1,512,104 1,456,271 1,470,618 1,408,768 Liabilities Financial liabilities held for trading 3,111 405 3,111 405 Amounts owed to banks 35,654 60,615 182,859 187,721 Amounts owed to customers 1,289,387 1,223,077 1,128,938 1,068,970 Debt securities in issue 12 12 - - Other liabilities 33,674 29,687 7,284 9,558 Accruals and deferred income 18,906 18,204 18,431 18,107 Provisions for liabilities and other charges 1,361 229 745 229 Subordinated liabilities 20,000 20,000 20,000 20,000 1,402,105 1,352,229 1,361,368 1,304,990 Shareholders' funds Called up issued share capital 9,120 9,120 9,120 9,120 Revaluation reserves 7,280 6,420 36,222 32,133 Other reserve 4,242 4,242 4,242 4,242 Profit and loss account 87,460 82,363 57,769 56,386 Dividend reserve 1,897 1,897 1,897 1,897 109,999 104,042 109,250 103,778 Total liabilities 1,512,104 1,456,271 1,470,618 1,408,768 The financial statements were approved by the Board of Directors on 25 July 2002 and signed on its behalf by: Albert Mizzi, Chairman Tom Robson, Chief Executive Officer Statement of Changes in Equity for the period 1 January 2002 to 30 June 2002 Group Share Revaluation Other Reserve Profit and Dividend Total Capital Reserves Loss Account Reserve Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 At 1 January 2001 9,120 7,790 4,242 70,095 1,422 92,669 Impact of adoption of IAS39 - (481) - 3,000 - 2,519 At 1 January 2001 as restated 9,120 7,309 4,242 73,095 1,422 95,188 Net fair value adjustments on investments - (1,623) - - - (1,623) Release of net gains on available-for-sale assets transferred to the income statement on disposal - (112) - - - (112) Transfer between reserves on disposal of property - 4 - (6) - (2) Net losses not recognised in the profit and loss account - (1,731) - (6) - (1,737) Profit attributable to shareholders - - - 5,307 - 5,307 Dividends paid - - - - (1,422) (1,422) Dividends - - - (1,186) 1,186 - At 30 June 2001 9,120 5,578 4,242 77,210 1,186 97,336 At 1 January 2002 9,120 6,420 4,242 82,363 1,897 104,042 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 paid - - - - (1,897) (1,897) Dividends - - - (1,897) 1,897 - At 30 June 2002 9,120 7,280 4,242 87,460 1,897 109,999 Statement of Changes in Equity for the period 1 January 2002 to 30 June 2002 (Cont.) Bank Profit and Share Revaluation Other Loss Dividend Capital Reserves Reserve Account Reserve Total Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 At 1 January 2001 9,120 25,914 4,242 53,025 1,422 93,723 Impact of adoption of IAS39 - - - 2,403 - 2,403 At 1 January 2001 as restated 9,120 25,914 4,242 55,428 1,422 96,126 Net fair value adjustments on investments - 692 - - - 692 Transfer between reserves on disposal of property - 4 - (6) - (2) Net gains/(losses) not recognised in the profit and loss account - 696 - (6) - 690 Profit attributable to shareholders - - - 2,558 - 2,558 Dividends paid - - - - (1,422) (1,422) Dividends - - - (1,186) 1,186 - At 30 June 2001 9,120 26,610 4,242 56,794 1,186 97,952 At 1 January 2002 9,120 32,133 4,242 56,386 1,897 103,778 Net fair value adjustments on investments - 4,070 - - - 4,070 Transfer between reserves on disposal of property - 19 - (29) - (10) 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 paid - - - - (1,897) (1,897) Dividends - - - (1,897) 1,897 - At 30 June 2002 9,120 36,222 4,242 57,769 1,897 109,250 Cash Flow Statement for the period 1 January 2002 to 30 June 2002 Group Bank 6 months to 6 months to 30 6 months to 6 months to 30 30/6/02 /6/01 30/6/02 /6/01 Lm000 Lm000 Lm000 Lm000 Cash flows from operating activities Interest and commission receipts 40,342 36,238 37,297 33,219 Interest and commission payments (21,373) (26,430) (22,636) (25,137) Payments to employees and suppliers (11,938) (12,624) (11,423) (12,986) Operating profit/(loss) before changes in operating assets/liabilities 7,031 (2,816) 3,238 (4,904) (Increase)/decrease in operating assets: Non-investment securities 3,344 (4) 3,344 1,979 Reserve deposits with Central Bank of Malta (1,479) (2,501) (1,527) (2,521) Loans and advances to banks (11,545) (15,784) (11,345) (57,652) Loans and advances to customers 4,859 (29,569) (1,189) (18,015) Other receivables (16,245) (1,897) (12,414) (3,727) Increase/(decrease) in operating liabilities: Amounts owed to banks (28,014) 16,530 (27,560) 14,519 Amounts owed to customers 66,310 25,490 59,968 17,827 Other payables 4,704 4,122 (2,274) 973 Net cash flows from/(used in) operating activities before tax 28,965 (6,429) 10,241 (51,521) Tax paid (666) (640) (425) (420) Net cash flows from/(used in) operating activities 28,299 (7,069) 9,816 (51,941) Cash flows from investing activities Dividends received 28 72 28 72 Interest received from investment securities 8,830 9,268 8,747 10,151 Proceeds on maturity/disposal of investment securities 56,080 90,599 46,972 101,224 Proceeds on disposal of tangible fixed assets 52 69 52 55 Purchase of investment securities (57,541) (93,184) (57,484) (89,425) Purchase of tangible fixed assets (1,897) (2,573) (1,871) (2,495) Net cash flows from/(used in) investing activities 5,552 4,251 (3,556) 19,582 Cash flows from financing activities Dividends paid (1,897) (1,422) (1,897) (1,422) Decrease in debt securities in issue - (16,110) - - Cash used in financing activities (1,897) (17,532) (1,897) (1,422) Increase/(decrease) in cash and cash equivalents 31,954 (20,350) 4,363 (33,781) Effect of exchange rate changes on cash and cash equivalents 658 1,079 (1,037) (680) Net increase/(decrease) in cash and cash equivalents 31,296 (21,429) 5,400 (33,101) 31,954 (20,350) 4,363 (33,781) Cash and cash equivalents at beginning of period 107,130 44,589 131,234 (27,241) Cash and cash equivalents at end of period 139,084 24,239 135,597 (61,022) 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 30/6/02 to 30/6/01 to 30/6/02 to 30/6/01 to 30/6/02 to 30/6/01 to 30/6/02 to 30/6/01 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Profit before tax Segment operating income 22,910 21,325 630 943 692 36 24,232 22,304 Common costs (14,753) (15,114) Profit on ordinary activities before 9,479 7,190 tax 30/6/02 30/6/01 30/6/02 30/6/01 30/6/02 30/6/01 30/6/02 30/6/01 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Assets Segment total assets 1,473,162 1,436,034 7,422 993 31,520 19,548 1,512,104 1,456,575 Average total assets 1,446,963 1,415,852 7,245 992 29,980 17,945 1,484,188 1,434,789 Net assets 104,062 95,198 4,380 1,922 1,557 216 109,999 97,336 b Geographical segments The group's activities are carried out within Malta. There are no identifiable geographical segments or other material concentrations. 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 2002. These figures are being published in terms of the Bye-Laws of the Malta Stock Exchange, section 6.05.06 (i). HSBC Bank Malta p.l.c. recorded a profit before tax of Lm9.5 million for the six months ended 30 June 2002. This represents an increase of Lm2.3 million or 31.8 per cent over profit before tax earned in the same period in 2001. Financial highlights are: * Profit after tax attributable to shareholders of Lm7.0 million for the six months ended 30 June 2002 - up Lm1.7 million or 32.3 per cent over the same period in 2001. * Net interest income of Lm15.9 million - up Lm1.7 million or 12.2 percent over 2001. * Other operating income of Lm0.8 million - up Lm0.7 million due to operating profits generated by the life assurance business. * Operating income of Lm24.2 million - up Lm1.9 million or 8.6 per cent over 2001. * Administrative expenses decreased by 6.4 per cent over the same period in 2001 as a result of lower staff related expenditure, lower IT system conversion costs and general cost containment policies in the current period. * Net impairment losses increased to Lm0.9 million (June 2001: Lm0.5 million). * Earnings per share of 19.3 cents for the six months ended 30 June 2002 - up from 14.5 cents over the same period in 2001. * A gross interim dividend per share of 8 cents - up from previous gross interim dividend payment of 5 cents. * Loans and advances to customers were Lm872.7 million at 30 June 2002 lower by Lm5.7 million at 31 December 2001 as subdued market conditions continued to impact on personal and corporate credit growth. * Amounts owed to customers increased to Lm1,289.4 million at 30 June 2002 from Lm1,223.1 million at 31 December 2001 - reflecting both customer preferences for more traditional deposit related products and a build up of liquidity in the retail deposit market. * Shareholders' funds increased by Lm6.0 million to Lm110.0 million. This represents an increase of 5.7 per cent and includes retention of Lm5.1 million of group profits and movements on revaluation reserves. Tom Robson, Chief Executive Officer, said: "Our results for the first six months are encouraging. Operating revenues continue to grow despite the low interest rate environment, operating costs were contained and our capital and liquidity ratios remain sound. We are grateful for the support of our customers and the contribution of our staff over this period. The Directors have approved the payment of a gross interim dividend per share of 8 cents which represents an increase of 60 per cent when compared to the previous interim dividend. The total net interim dividend payout of Lm1.9 million will be paid to all shareholders on the Company's register on 31 July 2002". HSBC Bank Malta plc is licensed as a credit institution and provider of investment services by the Malta Financial Services Centre. Registered Office: 233, Republic Street, Valletta, VLT 05, Malta. Telephone: (00356) 2124 5281 Company Registration Number: C3177 This information is provided by RNS The company news service from the London Stock Exchange

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