HSBC Bank Malta has reported pre-tax profit of €47m for the year ended 31 December 2015, a decrease of €5m, or 10%, compared with the previous year.

The bank announced an increase in the dividend payout ratio from 55% to 65%.

In its report, the bank said adjusted profit before tax, excluding the effect of the non-recurring item, was €61.5m, or 18% up on 2014.

The total capital ratio was 14.2% at 31 December 2015, compared with 13% at 31 December 2014.  

Dividend payout ratio increased to 65% from 55% in 2014.  

The bank said its cost efficiency ratio adjusted for the non-recurring early voluntary retirement provision was 59% compared with 57% in 2014.  Adjusted return on equity for the year ended 31 December 2015 was 8.8% compared with 7.7% in 2014. 

Net operating income before loan impairment charges of €176m was up 2% on 2014. The advances to deposits liquidity ratio further strengthened to 66%. ·

Net loans and advances to customers were €3,285m and remained in line with 2014. Customer deposits increased by 1.5% to €4,950m at 31 December 2015.

Andrew Beane, Chief Executive Officer at HSBC Bank Malta p.l.c., said:

“In 2015 the operating environment for eurozone banks remained difficult with record low interest rates and higher operating costs, principally driven by new regulation. 

"HSBC Malta's underlying profitability was strong and our signature capital strength and conservative risk appetite enabled the bank to perform well in the European Central Bank's regulatory assessments.

"Since I became Chief Executive in November my focus has been on reviewing the bank's strategy and re-focusing the business to restore growth. We have taken decisive action to reduce costs, resolved a long-running union dispute and made a number of key leadership appointments.

"And our strong balance sheet has enabled the bank, with the support of our regulator, to increase the dividend pay-out ratio from 55% to 65% so that a greater share of profits is returned to our owners. While the global economy shows some signs of increased stress, the local outlook remains more favourable and HSBC is open for business. As CEO I am committed to ensure that HSBC facilitates growth in Malta's economy and creates value for our 10,000 local shareholders while continuing to operate to the highest regulatory standards.

"We will achieve this by investing in our team of banking professionals in order to raise customer service standards, by using HSBC's unique international network to connect Malta's economy to the global financial system and by sustaining strict cost discipline. Despite the challenges our industry faces, HSBC Malta is in a strong position to navigate these and I am confident about the future.” 

The Board of Directors is recommending a final gross dividend of €0.026 per share (€0.017 net), which together with the €0.051 gross interim dividend paid in September 2015, results in a total gross dividend for the year of €0.077 per share (€0.05 net) – representing a 20% increase compared to the 2014 adjusted dividend.