HSBC Bank Malta has reported a pre-tax profit of €39.3m in the first three months of this year, an increase of 48% over the €26.5m profit reported in the same period last year.

"The higher interest rate environment was the biggest contributor to the increase in profits. Good progress was reported on the non-interest income while lower Expected Credit Losses (ECL) recoveries were registered," the bank said. 

Revenue was up €14.6m or 29% when compared to Q1 2023. This was mainly driven by higher net interest income earned on the placement of excess liquidity due to the higher interest rate environment. The bank additionally registered higher business volumes resulting in an increase in net fee income, foreign exchange and insurance income.

It said it had recorded an improvement in the credit quality of its loan book, resulting in a release of ECL (expected credit loss) of €1.8m in Q1 2024 compared to a release of €3.7m in Q1 2023. The Q1 2024 release reflected a generic improvement in the credit quality of the book.

The bank said it had managed to maintain costs at the same level as the same period last year despite the impacts of inflation and the continued investment in its people, technology, and premises.

Net loans and advances to customers remained broadly in line with Q4 2023 levels.

Customer deposits decreased marginally mainly driven by a decrease in operational corporate deposits.

The bank’s liquidity position remained strong and regulatory capital ratios continued to exceed regulatory capital requirements.