HSBC reports ‘modest decline’ in interim profits

HSBC Malta has reported a modest decline in profit before tax in the interim period 1 July 2013 to 18 November 2013, compared with the same period in 2012.

The bank said the period was impacted by a narrowing in interest margins earned in the low interest rate environment, and a lower contribution from the life insurance business.

Operating expenses for the period were lower than for the comparable period in 2012 primarily as a result of the non-recurrence of restructuring costs accounted for in the prior year.

Underlying costs, excluding restructuring costs, were well controlled and in line with the comparable period in 2012 as the savings achieved through the 2012 organisational effectiveness programme were offset by higher levels of regulatory and governance costs.

"In challenging market conditions, demand for personal and commercial loans was muted however there are tentative indications of increases in customer activity in both these business lines. Customer deposit levels remained broadly unchanged during this period despite the ongoing competitive pressures for deposits," the bank said.

The bank said that loan impairments remained below expectations and were broadly in line with the comparable period in 2012.

Mark Watkinson, HSBC chief executive said: "The European market remains very difficult and the low interest rate environment presents its own set of challenges for an organisation such as ours. Nevertheless, locally, GDP continues to show modest growth of approximately 1.5% and there are pockets of attractive opportunities globally, particularly in the Asia-Pacific region. Our aim remains to generate a resilient performance, focus on the long-term sustainability of our business and to leverage the HSBC global network to present opportunities for both our customers and for Malta as a whole."