HSBC Holdings Regulatory News (HSBA)

27 Jul 2006 11:31

HSBC Holdings PLC27 July 2006 The following is the text of an advertisement which is to be published in thepress in Malta on 28 July 2006 by HSBC Bank Malta p.l.c., a 70.03 per centindirectly-held subsidiary of HSBC Holdings plc. HSBC Bank Malta p.l.c. Half-Yearly Results for 2006 Review of Performance The published figures, which have been prepared in accordance with InternationalFinancial Reporting Standards for interim financial statements (IAS 34 'InterimFinancial Reporting'), have been extracted from HSBC Bank Malta p.l.c.'sunaudited group management accounts for the six months ended 30 June 2006. Thehalf-yearly results are being published in terms of Chapters 8 and 9 of theListing Rules of the Listing Authority - Malta Financial Services Authority andthe Prevention of Financial Markets Abuse Act 2005. These figures have beendrawn up according to the accounting policies used in the preparation of theannual audited accounts. All figures are stated in Maltese lira, the functional currency of HSBC Bank Malta p.l.c. The euro exchange rate ruling on 30 June 2006 was €1=Lm0.4293. TheUS dollar and sterling exchange rates ruling on the same day were US$1=Lm0.3375and £1=Lm0.6196. Average exchange rates for 2006 for euro, US dollar and sterlingwere €1=Lm0.4293, US$1=Lm0.3491 and £1=Lm0.6251. HSBC Bank Malta p.l.c. and its subsidiaries recorded a profit before tax ofLm20.6 million for the six months ended 30 June 2006 which represents anincrease of 11.3 per cent over the Lm18.5 million earned during the same periodin 2005. • Profit after tax attributable to shareholders of Lm13.4 million, an increase of 11.0 per cent over the Lm12.1 million earned during the same period in 2005. • Net interest income increased by 7.1 per cent over prior year to Lm22.8 million. • Non-interest income increased by 24.8 per cent, contributing Lm15.1 million to net operating income. • Administrative expenses increased by 8.8 per cent, primarily due to higher performance-based compensation for all staff. However, the cost: income ratio improved from 47.5 per cent to 45.5 per cent. • Risk provisions were at low levels supported by an unchanged conservative policy in the assessment of credit risk and effective risk management. Impaired loans reduced from Lm61.7 million to Lm58.8 million. • Customer deposits increased to Lm1,407.2 million at 30 June 2006 compared with Lm1,367.2 million at 31 December 2005. Funds, life insurance contracts and amounts under custody increased by Lm53.0 million in aggregate during the period. • Loans and advances to customers increased to Lm1,075.2 million at 30 June 2006 - up Lm59.1 million or 5.8 per cent over 31 December 2005. • Total assets of Lm1.71 billion at 30 June 2006 when compared with Lm1.66 billion at 31 December 2005. • Earnings per share for the first six months ended 30 June 2006 increased to 4.6 cents compared to 4.1 cents for the first six months of 2005. Comparative data has been adjusted for the April 2006 three-for-one bonus share issue. • Return after tax on capital employed increased to 10.9 per cent compared with 8.3 per cent for the first six months of last year. Shaun Wallis, Director and Chief Executive Officer of HSBC Bank Malta p.l.c.,said: "Our results for the first six months reflect continued business growth in allcustomer groups and across all product lines. Our focus continues to be onmaximising customer relationships. "The Board is recommending an interim gross dividend of 5.3 cents per share (3.4cents net of tax) which equates to a cash payment of Lm10.1 million. This willbe paid on 17 August 2006, to shareholders who are on the bank's register ofshareholders as at 4 August 2006. "We would like to thank our customers for their business during the first sixmonths of this year, to thank our staff for their continued high level ofcustomer service and to thank the community for their support. "We remain optimistic about economic activity and HSBC's business prospects inMalta." HSBC Bank Malta p.l.c. is a member of the HSBC Group, whose ultimate parentcompany is HSBC Holdings plc. Headquartered in London, HSBC Holdings plc is oneof the largest banking and financial services organisations in the world. TheHSBC Group's international network comprises over 9,500 offices in 76 countriesand territories in Europe, the Asia-Pacific region, the Americas, the MiddleEast and Africa. Income Statement for the period 1 January 2006 to 30 June 2006 Group Bank 6 mths 6 mths 6 mths 6 mths to to to to 30/6/06 30/6/05 30/6/06 30/6/05 Lm000 Lm000 Lm000 Lm000Interest receivable and similar income- on loans and advances and balances with Central Bank of Malta and Treasury Bills 32,542 29,430 31,736 27,877- on debt and other fixed income instruments 4,729 5,536 5,155 6,232Interest payable (14,464) (13,671) (14,685) (13,808)Net interest income 22,807 21,295 22,206 20,301 Fees and commissions receivable 6,738 5,587 5,167 4,427Fees and commissions payable (445) (359) (338) (287)Net fee and commission income 6,293 5,228 4,829 4,140 Dividend income 32 38 357 338Trading profits 3,525 3,598 3,525 3,607Net income from insurance financial instruments designated at fair value through profit or loss 1,147 3,860 - -Net gains on disposal of non-trading financial instruments 2,293 1,221 2,293 1,267Net earned insurance premium 7,327 8,305 - -Other operating income 1,415 677 508 2Total operating income 44,839 44,222 33,718 29,655 Net insurance claims incurred and movement in policyholders' liabilities (6,965) (10,857) - -Net operating income 37,874 33,365 33,718 29,655 Employee compensation and benefits (10,668) (9,938) (10,198) (9,478)General and administrative expenses (5,088) (4,472) (4,815) (4,233)Depreciation (1,188) (1,127) (1,176) (1,105)Amortisation of intangible assets (286) (296) (243) (262)Net operating income before impairment reversals and provisions 20,644 17,532 17,286 14,577Net impairment reversals 54 953 14 938(Provisions)/reversals for liabilities and other charges (130) 1 - 1Profit before tax 20,568 18,486 17,300 15,516Tax on profit (7,136) (6,396) (5,712) (5,297)Profit for the period 13,432 12,090 11,588 10,219 Profit attributable to shareholders of the bank 13,419 12,090 11,588 10,219 Profit attributable to minority interest 13 - - - Earnings per share 4.6c 4.1c 4.0c 3.5c Balance Sheet At 30Jun06 Group Bank 30/6/06 31/12/05 30/6/06 31/12/05 Lm000 Lm000 Lm000 Lm000Assets Balances with Central Bank of Malta, treasury bills and cash 105,658 77,121 105,658 77,118Cheques in course of collection 5,245 9,727 5,245 9,727Financial assets held for trading 3,631 3,907 3,631 3,907Financial assets designated at fair value through profit or loss 101,410 93,131 - -Investments 183,610 224,500 183,608 254,468Loans and advances to banks 160,594 162,882 161,332 202,332Loans and advances to customers 1,075,192 1,016,084 1,075,245 937,813Shares in subsidiary companies - - 9,682 20,350Intangible assets 10,240 9,433 754 829Property, plant and equipment 29,259 29,746 29,274 29,755Investment property 2,911 961 1,950 -Assets held for sale 4,455 4,918 4,519 5,864Current tax recoverable - 1,895 - 1,607Deferred tax asset - - 925 -Other assets 10,159 8,701 3,503 2,699Prepayments and accrued income 13,840 12,868 13,034 12,945Total assets 1,706,204 1,655,874 1,598,360 1,559,414 LiabilitiesFinancial liabilities held for trading 4,311 4,050 4,331 4,050Amounts owed to banks 32,082 22,667 32,082 22,667Amounts owed to customers 1,407,231 1,367,214 1,420,097 1,381,683Debt securities in issue - 12 - -Provision for current tax 3,653 - 3,861 -Deferred tax liability 3,589 3,843 - 349Liabilities to customers under investment contracts 7,865 8,297 - -Liabilities under insurance contracts issued 92,625 86,275 - -Other liabilities 14,419 16,755 13,544 16,192Accruals and deferred income 17,065 15,035 16,840 14,942Provisions for liabilities and other charges 155 25 25 25Total liabilities 1,582,995 1,524,173 1,490,780 1,439,908 EquityCalled up share capital 36,480 9,120 36,480 9,120Revaluation reserves 10,568 13,105 10,568 13,041Other reserve - 4,242 - 4,242Retained earnings 76,161 104,906 60,532 93,103Equity attributable to shareholders 123,209 131,373 107,580 119,506Minority interest - 328 - -Total equity 123,209 131,701 107,580 119,506Total liabilities and equity 1,706,204 1,655,874 1,598,360 1,559,414 Memorandum items Contingent liabilities 52,329 51,513 52,339 51,523Commitments 414,151 401,216 414,151 412,044 The interim financial statements were approved by the Board of Directors on27 July 2006 and signed on its behalf by: Albert Mizzi, Chairman Shaun Wallis, Chief Executive Officer Statement of Changes in Equity for the period 1 January 2006 to 30 June 2006 Attributable to shareholders of the bank Called up Reval- share uation Other Retained Minority Total capital reserves reserve earnings Total interest equity Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000GroupAt 01Jan05 as previously stated 9,120 11,473 4,242 109,618 134,453 - 134,453Impact of adoption of IFRS 4 - - - (199) (199) - (199)At 01Jan05 as restated 9,120 11,473 4,242 109,419 134,254 - 134,254Release of net gains on available-for- sale assets transferred to the income statement on disposal - (779) - - (779) - (779)Net fair value adjustments on investments - 257 - - 257 - 257Release of revaluation reserve on disposal of property - 52 - (52) - - -Net gains not recognised in the income statement - (470) - (52) (522) - (522)Profit for the period - - - 12,090 12,090 - 12,090Dividends - - - (6,473) (6,473) - (6,473)At 30Jun05 9,120 11,003 4,242 114,984 139,349 - 139,349 At 01Jan06 9,120 13,105 4,242 104,906 131,373 328 131,701 Release of net gains on available-for- sale assets transferred to the income statement on disposal - (1,490) - - (1,490) - (1,490)Net fair value adjustments on investments - (1,035) - - (1,035) - (1,035)Release of revaluation reserve on disposal of property - (12) - 18 6 - 6Net gains not recognised in the income statement - (2,537) - 18 (2,519) - (2,519)Bonus share issue 27,360 - (4,242) (23,118) - - -Increase in share capital of subsidiary - - - - - 91 91Profit for the period - - - 13,419 13,419 13 13,432Disposal of subsidiary - - - - - (432) (432)Dividends - - - (19,064) (19,064) - (19,064)At 30Jun06 36,480 10,568 - 76,161 123,209 - 123,209 Called up Reval- share uation Other Retained Total capital reserves reserves earinings equity Bank Lm000 Lm000 Lm000 Lm000 Lm000 At 01Jan05 9,120 11,479 4,242 87,493 112,334 Release of net gains on available-for- sale assets transferred to the income statement on disposal - (825) - - (825)Net fair value adjustments on investments - 248 - - 248Release of revaluation reserve on disposal of properties - 52 - (52) -Net gains not recognised in the income statement - (525) - (52) (577)Profit for the period - - - 10,219 10,219Dividends - - - (6,473) (6,473)At 30Jun05 9,120 10,954 4,242 91,187 115,503 At 01Jan06 9,120 13,041 4,242 93,103 119,506 Release of net gains on available-for- sale assets transferred to the income statement on disposal - (1,490) - - (1,490)Net fair value adjustments on investments - (971) - - (971)Release of revaluation reserve on disposal of properties - (12) - 18 6Net gains not recognised in the income statement - (2,473) - 18 (2,455)Bonus share issue 27,360 - (4,242) (23,118) -Effect of amalgamation of subsidiary - - - (1,995) (1,995)Profit for the period - - - 11,588 11,588Dividends - - - (19,064) (19,064)At 30Jun06 36,480 10,568 - 60,532 107,580 Cash Flow Statement for the period 1 January 2006 to 30 June 2006 Group Bank 6 mths 6 mths to 6 mths to 6 mths to 30/6/06 30/6/05 30/6/06 30/6/05 Lm000 Lm000 Lm000 Lm000 Cash flows fromoperating activities Interest and commission receipts 50,101 50,554 39,289 38,015Interest and commission payments (13,966) (13,989) (12,911) (12,913)Payments to employees and suppliers (16,791) (15,829) (15,030) (14,902)Operating profit before changes in operating assets/liabilities 19,344 20,736 11,348 10,200 (Increase)/decrease in operating assets:Trading instruments (392) 809 (392) 809Reserve deposits with Central Bank of Malta 214 73 214 73Loans and advances to banks with contractual maturity of over three months 3,609 (6,513) 3,609 (6,515)Loans and advances to customers (59,557) (49,491) (63,937) (55,695)Treasury bills with contractual maturity of over three months 2,000 29,907 2,000 29,907Cheques in course of collection 4,482 (866) 4,482 (866)Other receivables (578) (1,031) 297 (938) Increase/(decrease) in operating liabilities: Amounts owed to banks with contractual maturity of over three months 8,752 (22,367) 8,752 (22,367)Amounts owed to customers 43,996 25,118 42,665 26,941Other payables (4,409) 4,578 (3,720) 4,262Net cash from/(used in) operating activities before tax 17,461 953 5,318 (14,189)Tax paid (454) (1,100) (436) (933)Net cash flows from/(used in) operating activities 17,007 (147) 4,882 (15,122) Cash flows from investing activitiesDividends received 12 25 512 325Income received from financial instruments designated at fair value through profit or loss 1,579 695 - -Interest received from available-for- sale debt and other fixed income instruments 3,888 3,351 3,888 3,351Interest received from held-to-maturity debt and other fixed income instruments 2,673 2,759 3,084 4,116 Proceeds on disposal of financial instruments designated at fair value through profit or loss 4,180 7,463 - -Proceeds on disposal of available-for- sale instruments 30,411 11,401 30,411 11,299Proceeds on maturity of held-to-maturity debt and other fixed income instruments 17,189 25,293 47,177 25,293Proceeds on disposal of property, plant and equipment 56 439 56 431Purchase of financial instruments designated at fair value through profit or loss (14,185) (14,388) - -Purchase of available-for- sale instuments (11,967) (27,961) (11,967) (27,961)Purchase of property, plant and equipment and investment property (761) (591) (755) (584)Purchase of intangible assets (171) (344) (168) (52)Proceeds on disposal of shares in subsidiary company 450 - 450 -Net cash flows from investing activities 33,354 8,142 72,688 16,218Cash flows from financing activitiesDividends paid (19,064) (6,473) (19,064) (6,473)Decrease in debt securities in issue (12) - - -Maturity of subordinated loan stock - (19,914) - (20,000)Issue of units to minority interest 91 - - -Cash used in financing activities (18,985) (26,387) (19,064) (26,473)Effect of amalgamation of subsidiary company on cash and cash equivalents - - (65,840) -Increase/(decrease) in cash and cash equivalents 31,376 (18,392) (7,334) (25,377)Effect of exchange rate changes on cash and cash equivalents (5,447) 2,588 (5,447) 2,538Net increase/ (decrease) in cash and cash equivalents 36,823 (20,980) (1,887) (27,915) 31,376 (18,392) (7,334) (25,377)Cash and cash equivalents at beginning of period 136,468 97,051 175,915 138,108Cash and cash equivalents at end of period 167,844 78,659 168,581 112,731 Segmental Informationa Class of business Personal Corporate, financial Commercial investment banking services banking and markets Total 6 mths 6mths 6mths 6mths 6mths 6mths 6mths 6mths to to to to to to to to 30/6/06 30/0/05 30/6/06 30/6/05 30/6/06 30/6/05 30/6/06 30/6/05 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Group Profit before taxSegment operating income 18,814 16,048 12,920 11,204 6,140 6,113 37,874 33,365Segment impairment allowances (20) (174) (56) 1,128 - - (76) 954Common costs (17,230) (15,833)Profit before tax 20,568 18,486 30/06/06 31/12/05 30/06/06 31/12/05 30/6/06 31/12/05 30/6/06 31/12/05 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 AssetsSegment total assets 627,968 582,512 631,162 610,844 447,074 462,518 1,706,204 1,655,874Average total assets 602,651 500,335 621,003 654,596 454,796 457,678 1,678,450 1,612,609Total equity 36,359 38,261 75,517 79,806 11,333 13,634 123,209 131,701 b Geographical segments The group's activities are carried out in Malta. There are no identifiable geographical segments orother material concentrations. This information is provided by RNS The company news service from the London Stock Exchange