HSBC restructures €160m in debt in one year

Over the past 12 months, HSBC Bank Malta has restructured over €160 million in debt, Richard Cottell, head of the bank's commercial banking and senior management team, told the meeting on Monday.

Mr Cottell said Malta was still at the beginning of the recession rather than at the end of it and the economy's performance depended greatly on business confidence. Utility tariffs, in particular, are affecting business, he acknowledged.

"We are realistic, not pessimistic. Maltese business' resilience never ceases to amaze me. But care for your bankers," Mr Cottell advised.

"If there are issues, talk to us early. We don't like surprises. Cash has always been king and it is more so today. Cash flow issues must be addressed."

Mr Cottell pointed out that the prevalence of barter within some sectors was cause for concern. The chain could become a deck of cards if one business did not honour the agreement. Speaking to The Times Business after the meeting, Mr Cottell said there have been a number of Maltese business people who have generated significant cash but then invested it in non-core activities. Real estate was one.

"The problem is that real estate is slowing and businesses cannot realise that non-cash asset, which is why there is a lack of cash in the market today," Mr Cottell explained.

"The majority of our clients come to us early and we can help. Some, however, live in denial and come to us too late. The question then is whether it is worth throwing good money after bad."

Mr Cottell said owners or stakeholders often did not know the way forward when their business stumbled.

However, following an independent review, the bank has helped numerous businesses by showing them there is a different way to run their operation.

"Providing you have a willing stakeholder, it can work very well," Mr Cottell said.