HSBC Malta has reported a profit before tax of €57.3 million for the year ended December 31, 2022, an increase of €30.4m or 113% over 2021. It was the second strong performance in as many years, it having seen the profit rise by 157% in 2021 over 2020, a year impacted by Covid-19. 

The bank said on Tuesday that the improved profitability was driven by rising interest rates, favourable market movements impacting insurance revenues, higher trading income, continued good progress on cost management and a significant recovery on a commercial non-performing loan.

The directors are recommending a gross final dividend of 5.6% per share. 

The bank said net loans and advances to customers decreased marginally by €21.6m last year from the previous one. But customer deposits increased by 6% to €5,971m at the end of 2022.

The bank also reported a strong liquidity position with a stable advances-to-deposits ratio at 53%.

Uncertain interest rates scenario

Bank CEO Simon Vaughan Johnson hailed the performance. Looking ahead, he said the bank is making good progress on the transformation of its offices at 8 Mill Street, Qormi which is currently the largest real-estate project of its kind for HSBC in Europe.

“This important capital investment in Malta will create a modern, fit-for-purpose business environment for all who work in or visit the campus and will facilitate a number of carbon net-zero initiatives that are fully aligned to our published targets.”

On interest rates, he said the outlook for 2023 remains uncertain in view of heightened levels of inflationary pressures and continued geopolitical tensions.