Issue link: https://maltatoday.uberflip.com/i/1211889
4 maltatoday | WEDNESDAY • 19 FEBRUARY 2020 NEWS CONTINUED FROM PAGE 1 "If we want to have a growing and thriving connected economy in the long-term, Malta has to be operat- ing according to the rules which the international economy requires... it is a critical year for that action to happen, and I think there is the po- tential for this to take place - we've now got to get on with that," he said. Questioned on whether he was confident the country was on the right track towards repairing its reputation, Beane said that "more than confidence" was required. "It required evidence and outcomes," he reiterated, "This is an important year and it's clear what action needs to be taken." Beane said the issues Malta was facing were not unique, and that other countries have faced them and been able to raise their standards and re-calibrate them to those of the international economy. "And that's a long-term positive thing for eco- nomic development," he said. HSBC Malta posts €30.7 million pre-tax profit in 2019 HSBC Bank Malta has reported an adjusted profit before tax for 2019 €45.3 million in a year during which it closed several retail branches to move operations to a flagship head- quarters branch in Qormi. The profits were an increase of €8.8 million (24% over 2018). The adjusted results exclude the impact of a €16 million restructur- ing position in 2019, and a €1.4m brokering remediation provision, which leaves profit before tax at €30.7 million, a reduction of €7.8m over 2018. Reported profit attributable to shareholders was €20.2m resulting in earnings per share of 5.6 cents compared with 8.0 cents in the same period in 2018. HSBC reported a 1% ncrease to €110.1m in net interest income, despite a European Central Bank deposit rate declining further, but with the bank increasing revenues on excess liquidity due to proactive management within the same con- servative risk appetite. Net non-interest income marginal- ly decreased with strong fee perfor- mance within commercial banking as a result of the new fees offset by a reduction in fee income within In- surance due to the disposal of a spe- cific insurance portfolio in Decem- ber 2018. Net trading income increased by €1.8m due to a fair value gain on VI- SA shares. Reported operating costs were €120.7m, which includes the re- structuring provision of €16.0m which will deliver sustainable sav- ings from 2020 onwards with full annualised saving delivered in 2021. People misunderstand what's hap- pening in banking On HSBC's presence in Malta, in light of the closure of a number of branches announced last year, Beane said that people might tend to misunderstand developments in the banking sector. The closure of branches, he highlighted, reflected a strong customer trend to use digital services. "Let me give you a couple of data points: digital usage went up 92% last year and new customers as HS- BC Malta increased by 60%, 95% of whom applied online," he said. "We are here talking to each other and you are recording this interview on a mobile phone. So, while not everyone is going to use mobile and digital for their banking services, lots more people are... and we sim- ply have to respond to that. Branch- es are just as important for the fu- ture as they have been for the past - they're just changing and moden- rnising, just like banking has done through generations," he said. HSBC branches will soon have im- proved access, such as better park- ing facilities, more flexible hours, and more services he said. "I think they'll be better branches for cus- tomers and colleagues, and we sim- ply are organising around how cus- tomers are living their lives." Pressed on whether HSBC was committed to Malta in the long- term, Beane stopped shy of commit- ing to this specifically, but he said that people had to judge the bank by its actions. "We're opening a new flagship branch in Qormi, and we're making good progress [on this]," he said, "We've ordered new furniture and it's on the ship at the moment." "People need to see what we are doing - we're taking action and launching new things, and that's coming this year building on what we launched in 2019," Beane added. HSBC Malta posts €30.7 million pre-tax profit in 2019; a 24% increase over 2018 Financial performance Adjusted profit before tax for the year ended 31 December 2019, which excludes the impact of notable items, of €45.3m, which represents an increase of €8.8m, or 24% compared with prior year. Reported profit before tax which includes the impact of a one-off restructuring provision of €30.7m, a decrease of €7.8m or 20%. The investment in restructuring will deliver sustainable cost savings going forward. Recommended gross final dividend of 2.1 cents per share (1.4 cents per share net of tax). Adjusted cost efficiency ratio of 70% compared with 73% for 2018. Reported profit attributable to shareholders of €20.2m for the year ended 31 December 2019 resulting in earnings per share of 5.6 cents compared with 8.0 cents in the same period in 2018. Strong capital base with a common equity tier 1 ratio of 16.4% up from 14.6% at the end of 2018. Total capital ratio was 19.0% compared to 17.0% at 31 December 2018. Return on equity of 4.3% for the twelve months ended 31 December 2019 reflecting the investment in restructuring compared with 6.1% for the same period in 2018. Excluding notable items return on equity is 6.4%. Net loans and advances to customers were €3,257m, up €147m or 5% compared with 31 December 2018. Customer deposits increased by 2% to €4,977m at 31 December 2019. Strong Liquidity Position with advances to deposits ratio marginally higher at 65%.