CEO Geoffrey Fichte says HSBC will ‘continue to pursue growth opportunities in Malta’

HSBC Bank Malta CEO Geoffrey Fichte has stated that the bank will continue to pursue avenues for growth in Malta, despite talks of HSBC Group’s potential exit from the country.

His remarks came in HSBC Bank Malta’s interim financial report for the six months ended 30th June 2024 (1H 2024), during which it reported €78.6 million in pre-tax profit, 32.6 per cent more than the same period in 2023.

The bank’s Board of Directors also recommended an interim gross dividend of €0.10 per share, amounting to €36 million. It will be paid on 17th September 2024 to shareholders who are on the bank’s register of shareholders on 16th August 2024.

In his comments about the performance, Mr Fichte said that HSBC Bank Malta is now celebrating 25 years in Malta, and the strong results in 1H 2024 “reflect the strong relationship with customers built over these years.”

“We are growing revenue across all of our businesses and continue to invest for the long term,” he said.

This comes after the appointment of Georges Elhedery as CEO of the wider HSBC Group continued to raise questions over the strategic direction for HSBC Bank Malta and its future in the country.

There have been several rumours about HSBC’s wavering commitment to Malta for years, something that Mr Fichte, who has been HSBC Bank Malta CEO since May 2023, has dismissed on a number of occasions.

He has repeatedly mentioned significant local investments by the bank, including the new HSBC Hub – its new headquarters in Qormi that came after a €30 million investment – and a €5 million upgrade to its ATM network.

However, many have also pointed towards HSBC’s diminishing footprint in Malta, with it closing eight branches in late 2019 and two more during the COVID-19 pandemic. While two were re-opened, they are reportedly teller-less.

In the latest interim report, Mr Fichte once again highlighted the long-term investments that HSBC Bank Malta made throughout the start of 2024.

“This year, we signed an ambitious and ground-breaking three-year collective agreement to energise our talent on customer service excellence. We inaugurated our new headquarters, HSBC Hub, in Qormi, a €30 million investment in the future of work. We accelerated investments in technology, sustainability and new ATMs to support customers,” he said.

Mr Fichte also said that the bank’s capital and liquidity remain strong, and it will “continue to pursue growth opportunities in Malta.”

In an interview with Times of Malta earlier this year, Mr Fichte said that he was appointed with the mandate to “grow and improve” HSBC Bank Malta and “manage it for the long run.” He was adamant that Malta is not one of the countries HSBC Group is considering exit to grow its Asia business.

First six months of 2024 performance

During the first six months of 2024 (1H 2024), HSBC Bank Malta reported a record first-half performance driven by the higher interest rate environment.

Net interest income surged upwards by €17 million to €106.6 million (1H 2023: €89.7 million), primarily a result of higher interest rates, with the average interest rates in 1H 2024 being higher than those of the same period last year. Net fee income remained largely stable at €10.8 million (1H 2023: €10.7 million).

Income from HSBC Bank Malta’s insurance subsidiary amounted to 4.8 million, a notable increase from the €2 million reported during the comparative period in 2023.

During 1H 2024, the bank also reported a 13.3 per cent rise in operating expenses to a total of €56.1 million (1H 2023: €49.5 million). This was  mainly due to increases in staff costs, IT expenses, and real estate costs.

In the reporting period, there was a release of €7 million in expected credit losses (ECL), compared to the €2.6 million release in 1H 2023.

HSBC Life Assurance (Malta) Ltd, the group’s life insurance company, reported €4.5 million in profit when compared to the €1.6 million in the same period in 2023.

Net loans and advances to customers amounted to €3 billion, a decrease of €103 million (three per cent) when compared to the figure at the end of 2023. Non-performing loans continued to decrease by 28 per cent, while the bank also retained a prudent credit policy.

HSBC Bank Malta’s investment portfolio increased by €394 million to €1.7 billion as it invested in longer tenure assets to hedge against future movements in interest rates. Customer accounts were €6 billion as at the end of the reporting period, decreasing by 1.4 per cent from 31st December 2023.

Total capital ratio increased to 24.1 per cent during 1H 2024 when compared to 23.5 per cent as at the end of 2023.