CEO Geoffrey Fichte lauds HSBC Malta’s record profit performance in 2023

CEO Geoffrey Fichte has commended the work done by HSBC Bank Malta and its employees to achieve record profitability over 2023, prompting one of the bank’s highest annual dividend in 10 years.

This came as the bank published its financial results for the year ending 31st December 2023 on Wednesday (today), reporting a pre-tax profit of €133.9 million, a 141 per cent increase from the previous year. There was strong revenue growth across all three of its global businesses, supported by increasing net interest income, enabling it to deliver its best return on equity in more than a decade. Operating costs rose by three per cent from 2022, marked by an increase in staff costs of €3.7 million.

HSBC Malta also reported a release of expected credit losses (ECL) of €4.6 million during the year, a significant drop when compared to 2022’s €9.6 million. In 2022, its commercial banking business reported a net release of €12.3 million, mainly attributable to a significant recovery on a commercial non-performing loan which was largely provided for in prior years.

In terms of net loans and advances, HSBC Malta experienced a €91.3 million decrease to €3.1 billion, while asset quality continued to improve through a 14 per cent reduction in commercial non-performing loans and 20 per cent decrease in retail non-performing loans. Customer deposits grew by three per cent to €6.1 billion, with the bank also maintaining a healthy advance to deposit ratio at 50.2 per cent, while liquidity rations remained well in excess of regulatory requirements. Its financial investments portfolio also experienced an increase, growing by 31 per cent to €1.3 billion.

Mr Fichte noted that the record profit performance in 2023 reflected the “inherent strength” of the business and its balance sheet.

“We benefitted from increasing net interest income and strengthened business relationships with our customers,” he said.

“Our lines of business, commercial banking, wealth and personal banking, and global markets, continue to grow from their respective areas of strength and are looking to grow by supporting customers and maximising sustainable finance opportunities, leveraging our international advantage, maintaining proactive cost management and a robust risk management culture,” Mr Fichte added.

He said that HSBC Malta will “continue to adhere to the highest standards which are synonymous with the HSBC brand,” while also continuing to diligently work to “support growth in Malta’s economy by facilitating new business and cross-border trade.”

In addition to the results, HSBC Malta’s Board of Directors has resolved to recommend a dividend pay-out ratio of 40 per cent on report profits, with a final gross dividend of €0.09 per share (€0.0585 per share net of tax), bringing the total dividend for 2023 to €0.15 (€0.0975 net of tax). This is one of the highest annual dividend that the bank has paid in the last decade.

HSBC Malta confirmed that the final dividend will be paid on 25th April 2024 to shareholders on the bank’s register of shareholders on 19th March 2024, subject to approval at the Annual General Meeting scheduled for 18th April 2024.

Mr Fichte said that the bank is proud of milestones such as last August’s dividend pay-out, being the top performer in the Malta Stock Exchange in 2023, as well as the recently announced dividend pay-out.

“Our people are the cornerstone of the bank so we will continue to empower our employees to reach their full potential to deliver customer service excellence and be the best versions of themselves by investing in opportunities for colleagues to develop skills, learn new capabilities, and adapt to the future, while reducing complexity and bureaucracy,” he affirmed.

He remarked that the bank achieved a number of awards such as Banker of the Year from the Financial Times due to its employees’ collective effort. Mr Fichte also referred to an agreement signed with the Malta Union of Bank Employees (MUBE) in January, stating that this is an “ambitious and ground-breaking agreement” that is characterised by “significant enhancements to employee pay, benefits, and retirement pension plans.”

Mr Fichte also commended the work done by the HSBC Malta Foundation, fulfilling the bank’s Corporate Sustainability strategy.

He also said that it was a “proud moment” for him to inaugurate the HSBC Hub, the bank’s new headquarters in Qormi. “We are investing over €30 million to transform this complex into a state-of-the-art office for colleagues and customers, with ample parking, latest technologies and flexible meeting spaces,” he said.

Mr Fichte also stated that the bank plans to replace and upgrade its ATM fleet.

“HSBC Bank Malta remains an active participant in the local economy and we are committed to continue offering the best service both to our customers and to the community we serve,” Mr Fichte concluded.