Third-quarter results show that HSBC Bank Malta’s ‘turnaround strategy is working,’ says CEO

HSBC Bank Malta CEO Geoffrey Fichte has stated the bank’s “strong” performance in the first nine months of 2023 has demonstrated that its “turnaround strategy is working”.

This comes after the bank on Monday released its interim financial results for the nine months ending 30th September 2023, where it recorded a pre-tax profit of €100.8 million. This represents an increase of €67.9 million from the €32.9 million reported in the same period last year. The bank’s Directors stated that this was driven by the restatement of IFRS 17, a standard that provides a consistent basis for financial reporting for insurance. They added that the increase in profitability is mainly attributable to strong interest income, improved credit quality of its loan book, as well as a continued focus on cost management and investment in the bank’s future.

Mr Fichte, who was only appointed CEO of the bank last May, said that the “record” third-quarter results reflect the “strength” of HSBC Bank Malta and the “confidence” that customers have in it even in a volatile world.

Revenues increased by €64.2 million when compared to the same period last year, largely due to higher net interest income as a result of interest rate rises. The Directors stated that this reflects the “strength and diversification” of its customer base.

The bank recorded an improvement in the credit quality of its loan book, resulting in a release of expected credit losses of €3.7 million when compared to the €10 million recorded in the third quarter of 2022. This reflects the bank’s upgrade in facilities which were granted moratoria during the COVID-19 pandemic, as well as the general improvement in the Maltese economy. The release in 2022 was primarily attributable to a “significant recovery” on a commercial non-performing loan which was largely provided for in prior years.

Costs decreased by €10 million from the same period in 2022, largely due to higher regulatory fees being booked in 2022’s third quarter as a result of a change in legislation regulating cash contributions towards the Depositor Compensation Scheme, a rescue fund for depositors of failed banks licensed by the Malta Financial Services Authority (MFSA). This was also the case due to restructuring provisions booked in 2022, as well as an insurance refund received in 2023.

Net loans and advances to customers and customer deposits remained “broadly in line” with levels as at the end of 2022, with the bank retaining a “strong” liquidity position with regulatory capital ratios continuing to “exceed” regulatory capital requirements.

“These results demonstrate that our turnaround strategy is working. Our robust risk management is protecting and supporting customers while delivering value for shareholders,” he continued.

He said that HSBC Bank Malta is “positive” and will “continue to invest to improve its customer experience”.

Mr Fichte thanked the bank’s team for the “strong performance” and its customers for their business.