HSBC Malta made a pre-tax profit of €49.8m in 2017, a decrease of €12.4m, or 19.9%, compared to 2016.
In a statement on Tuesday, the bank said adjusted profit before tax, which excludes the effect of notable items, was €55.6m, 9.5% down on 2016.
The net dividend for 2017 was €40.2m, up 54.0% compared with the previous year. It includes a special dividend of €20m to be distributed from surplus retained earnings.
It said earnings per share were of 8.6 per cent compared with 11.2 cent in 2016.
The advances to deposits liquidity ratio remained stable at 65.6%.
Net loans and advances to customers were €3,129m, down 5.8% compared with
2016.
Customer deposits decreased by 4.7% to €4,766m at 31 December 2017.
The bank explained that in 2016, it recognised a gain on disposal of the bank’s membership interest in Visa Europe amounting to €10.8m and raised a provision totalling €8m in relation to a remediation of the legacy operational failure in the bank’s brokerage business. During 2017, the remediation programme was largely completed and it was assessed that a partial reversal of the conservatively estimated provision was warranted. In this regard, a reversal of €1.8m was
effected in 2017.
During the year, the bank re-examined its approach to the provision for the collective agreement clauses related to future employee benefits. A longer-term view was assumed in the application of the current clauses which resulted in an additional charge of €7.6m in 2017 as compared with the charge of €2m in 2016.
While the movements in this provision will periodically occur depending on the changes in the composition of the bank’s employee base, the provision adjustment in 2017 was not related to the business performance of the
year, the bank explained.
Profit attributable to shareholders amounted to €30.9m resulting in earnings per share of 8.6 cent compared with 11.2 cent in 2016.
The Board recommended maintaining a current dividend payout ratio of 65% of net profit. The Board also made a decision to return part of retained earnings to the shareholders and recommended an extraordinary dividend of €20m in addition to the regular dividend paid out of the net profit for the year.
The final gross dividend will be 12.4 cent per share (8.1 cent per share net of tax). Together with the interim dividend paid in September 2017, the total gross dividend for 2017 will be 17.1 cent per share (11.1 cent per share net of tax) or €61.6m (€40.2m net of tax) representing a 54.0% increase on the dividends paid for 2016. The final dividend will be paid on 19 April 2018 to shareholders who are on the bank’s register of shareholders at 13 March 2018.
The bank said the year under review was characterised by broadly stable but persistently low interest rates and increasing excess liquidity in the market while attractive investment opportunities remained limited. In this environment, a record number of debt issuances by corporate entities was registered on the Malta Stock Exchange fuelled by investors’ demand for higher yield.
PROFITS JUMP FOR HSBC GLOBAL
HSBC (group) on Tuesday reported a 141.4% jump in pre-tax profit for the year to December 31 to 17.2 billion US dollars.
That was amid a rise in reported revenue to 51.4 billion US dollars from 48 billion US dollars a year earlier.
The bank said its "pivot to Asia" generated returns and drove over 75% of both reported and adjusted profit in 2017.
The results are the last under chief executive Stuart Gulliver, who is set to hand over the reins to John Flint this week.
Mr Gulliver said: "These good results demonstrate the strength and potential of HSBC. All our global businesses grew adjusted profits and we concluded the transformation programme that we started in 2015.
"HSBC is simpler, stronger and more secure than it was in 2011. It has been my great privilege to lead HSBC for the last seven years, and in handing over to John I am confident the organisation is in great hands."