16th Feb 2006 11:15
HSBC Holdings PLC16 February 2006 The following is the text of an announcement which is to be published in thepress in Malta on 17 February 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. Preliminary Profit Statement for the year ended 31 December 2005 The preliminary profit statement is published persuant to Listing Rule 9.39 ofthe MFSA Listing Authority and Article 4 (2) (b) of the Prevention of FinancialMarkets Abuse (Disclosure and Notification) Regulations, 2005. Figures have beenextracted from HSBC Bank Malta p.l.c.'s Annual Report and Accounts which havebeen audited by KPMG. All figures are stated in Maltese lira, the functional currency of HSBC Bank Malta p.l.c. The euro exchange rate ruling on 31 December 2005 was €1 = Lm0.4293. The US dollar and sterling exchange rates ruling on the same day were US$1 = Lm0.3637and £1 = Lm0.6245. Average exchange rates for 2005 for euro, US dollar and sterling €1 = Lm0.4299, US$1 = Lm0.3453 and £1 = Lm0.6285. Review of Performance During the year ended 31 December 2005, HSBC Bank Malta p.l.c. and itssubsidiaries generated a profit before tax on ordinary activities of Lm36.7million, an increase of Lm3.9 million or 11.7 per cent compared with the yearended 31 December 2004. Profit attributable to shareholders was Lm24.1 million, an increase of Lm2.1million on the previous year. Earnings per share increased from a 2004 figure of 30.2 cents to 33.0 cents,with the pre-tax return on average shareholders' funds increasing from 24.7 percent in 2004 to 27.6 per cent. Tax on profit on ordinary activities for 2005 increased to Lm12.6 million fromLm10.8 million in 2004. Net interest income grew by 13.2 per cent over prior year and contributed Lm46.9million to total operating income. Non-interest income levels grew by 16.3 per cent, contributing Lm21.8 million tonet operating income. Operating expenses were Lm32.1 million, an increase of Lm0.5 million over prioryear figures. As a result, the group's cost:income ratio improved to 46.7 per cent from 52.5per cent in 2004. Net impairments reduced and recoveries contributed Lm0.1 million toprofitability. The Board is recommending a final ordinary dividend of 19.1 cents gross pershare and a special dividend of 21.1 cents gross per share, giving a total finaldividend of 40.2 cents gross per share. The dividends will be payable toshareholders who are on the register of shareholders as at 21 February 2006. Agross interim dividend of 19.1 cents and a special dividend of 27.4 cents werepaid in August 2005. The Board is also recommending a three-for-one bonus share issue. The bonusshares will be allotted to shareholders on the register of members as at closeof trading on the Malta Stock Exchange on 18 April 2006. These bonus shares willbe available for trading by the shareholders at the opening of business on 19April 2006. Shaun Wallis, Director and Chief Executive Officer of HSBC Bank Malta p.l.c.said: "2005 has been another successful year for HSBC Bank Malta p.l.c. withstrong sales growth across all our key lines of business, reflecting theincreased economic activity of our customers. "These results were achieved by building the market leading bank in Malta with astrong customer-driven culture and a strong sense of community spirit and socialresponsibility." 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 9,700 offices in 77 countriesand territories in Europe, the Asia-Pacific region, the Americas, the MiddleEast and Africa. Income Statement for the year 1 January 2005 to 31 December 2005 Group Bank 2005 2004 2005 2004 Lm000 Lm000 Lm000 Lm000Interest receivable and similar income- on loans and advances, balances with Central Bank of Malta and Treasury Bills 60,994 56,531 58,048 53,088- on debt and other fixed income instruments 13,205 12,276 12,196 11,817Interest payable (27,327) (27,413) (27,648) (27,717)Net interest income 46,872 41,394 42,596 37,188Fees and commissions receivable 11,866 9,567 9,342 7,685Fees and commissions payable (814) (765) (686) (646)Net fee and commission income 11,052 8,802 8,656 7,039Dividend income 473 363 22,604 5,709Trading profits 7,206 6,562 7,215 6,552Net income from insurance financial instruments designated at fair value through profit or loss 8,523 3,496 - -Net gains on disposal of non-trading financial instruments 1,204 1,716 1,266 1,019Net earned insurance premium 16,236 14,198 - -Other operating income 723 737 24 50Total operating income 92,289 77,268 82,361 57,557Net insurance claims incurred and movement in policyholders' liabilities (23,661) (17,168) - -Net operating income 68,628 60,100 82,361 57,557Employee compensation and benefits (20,132) (19,656) (19,203) (18,698)General and administrative expenses (9,075) (8,590) (8,527) (8,026)Depreciation (2,197) (2,311) (2,157) (2,253)Amortisation of intangible assets (635) (797) (556) (616)Other operating charges (26) (206) (6) (206)Net operating income before impairment reversals and provisions 36,563 28,540 51,912 27,758Net impairment reversals 142 4,012 121 3,649Reversals of provisions for liabilities and other charges 1 301 1 301Profit before tax 36,706 32,853 52,034 31,708Tax on profit (12,642) (10,843) (17,854) (10,627)Profit for the year 24,064 22,010 34,180 21,081 Profit attributable to shareholders of the bank 24,057 22,010 34,180 21,081 Profit attributable to minority interest 7 - - - Earnings per share 33.0c 30.2c 46.8c 28.9c Balance Sheet at 31 December 2005 Group Bank 2005 2004 2005 2004 Lm000 Lm000 Lm000 Lm000AssetsBalances with Central Bank ofMalta, Treasury Bills and cash 77,121 106,806 77,118 106,781Cheques in course of collection 9,727 4,458 9,727 4,458Financial assets held for trading 3,907 4,826 3,907 4,826Financial assets designated at fair value through profit or loss 93,131 72,533 - -Investments 224,500 238,446 254,468 268,226Loans and advances to banks 162,882 131,283 202,332 172,363Loans and advances to customers 1,016,084 976,296 937,813 884,868Shares in subsidiary companies - - 20,350 19,850Intangible assets 9,433 8,782 829 964Property, plant and equipment 29,746 30,647 29,755 30,620Investment property 961 346 - -Assets held for sale 4,918 3,150 5,864 3,150Current tax recoverable 1,895 1,372 1,607 1,310Other assets 3,522 3,715 2,699 2,856Prepayments and accrued income 12,868 16,486 12,945 15,716Total assets 1,650,695 1,599,146 1,559,414 1,515,988 LiabilitiesFinancial liabilities held for trading 4,050 9,917 4,050 9,917Amounts owed to banks 22,667 48,336 22,667 48,336Amounts owed to customers 1,367,214 1,288,618 1,381,683 1,296,687Debt securities in issue 12 12 - -Deferred tax liability 3,843 2,251 349 564Liabilities to customers under investment contracts 8,297 - - -Liabilities under insurance contracts issued 81,096 65,996 - -Other liabilities 16,755 14,522 16,192 13,306Accruals and deferred income 15,035 15,101 14,942 14,818Provisions for liabilities and other charges 25 26 25 26Subordinated liabilities - 19,914 - 20,000Total Liabilities 1,518,994 1,464,693 1,439,908 1,403,654 EquityCalled up share capital 9,120 9,120 9,120 9,120Revaluation reserves 13,105 11,473 13,041 11,479Other reserve 4,242 4,242 4,242 4,242Retained earnings 104,906 109,618 93,103 87,493Equity attributable to shareholders 131,373 134,453 119,506 112,334Minority interest 328 - - -Total equity 131,701 134,453 119,506 112,334Total liabilities and equity 1,650,695 1,599,146 1,559,414 1,515,988 Memorandum itemsContingent liabilities 51,513 44,127 51,523 44,537Commitments 419,573 330,584 430,401 346,758 Statement of Changes in Equity for the year 1 January 2005 to 31 December 2005 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 Lm000Group At 1 January 2004 9,120 11,365 4,242 106,435 131,162 - 131,162Release of net gains on available-for-sale assets transferred to the income statement on disposal - (1,357) - - (1,357) - (1,357)Net fair value adjustments on investments - 615 - - 615 - 615Surplus on revaluation of freehold and long leasehold properties - 850 - - 850 - 850Net gains not recognised in the income statement - 108 - - 108 - 108Profit for the year - - - 22,010 22,010 - 22,010Dividends - - - (18,827) (18,827) - (18,827)At 31 December 2004 9,120 11,473 4,242 109,618 134,453 - 134,453 At 1 January 2005 as previously stated 9,120 11,473 4,242 109,618 134,453 - 134,453Impact of adoption of IFRS 4 - - - (199) (199) - (199) At 1 January 2005 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 - (783) - - (783) - (783)Net fair value adjustments on investments - 757 - - 757 - 757Release of revaluation reserve on disposal of property - 30 - (45) (15) - (15)Movement in deferred tax on revaluation of property - 1,628 - - 1,628 - 1,628Net gains not recognised in the income statement - 1,632 - (45) 1,587 - 1,587Share capital of subsidiary - - - - - 321 321Profit for the year - - - 24,057 24,057 7 24,064Dividends - - - (28,525) (28,525) - (28,525)At 31 December 2005 9,120 13,105 4,242 104,906 131,373 328 131,701 Called up share Revaluation Other Retained Total capital reserves reserve earnings equity Lm000 Lm000 Lm000 Lm000 Lm000Bank At 31 December 2003 as previously stated 9,120 32,456 4,242 85,239 131,057Effect of change in accounting policy for valuation of investment in subsidiary companies - (21,752) - - (21,752)At 31 December 2003 as restated 9,120 10,704 4,242 85,239 109,305 At 1 January 2004 9,120 10,704 4,242 85,239 109,305Release of net gains on available-for-sale assets transferred to the income statement on disposal - (660) - - (660)Net fair value adjustments on investments - 585 - - 585Surplus on revaluation of freehold and long leasehold properties - 850 - - 850Net gains not recognised in the income statement - 775 - - 775Profit for the year - - - 21,081 21,081Dividends - - - (18,827) (18,827)At 31 December 2004 9,120 11,479 4,242 87,493 112,334 At 1 January 2005 9,120 11,479 4,242 87,493 112,334Release of net gains on available-for-sale assets transferred to the income statement on disposal - (823) - - (823)Net fair value adjustments on investments - 727 - - 727Release of revaluation reserve on disposal of property - 30 - (45) (15)Movement in deferred tax on revaluation of property - 1,628 - - 1,628Net gains not recognised in the income statement - 1,562 - (45) 1,517Profit for the year - - - 34,180 34,180Dividends - - - (28,525) (28,525)At 31 December 2005 9,120 13,041 4,242 93,103 119,506 Cash Flow Statement for the year 1 January 2005 to 31 December 2005 Group Bank 2005 2004 2005 2004 Lm000 Lm000 Lm000 Lm000 Cash flows from operating activitiesInterest and commission receipts 101,511 84,933 77,419 63,919Interest and commission payments (30,381) (31,843) (28,359) (30,256)Payments to employees and suppliers (29,547) (25,841) (27,938) (25,133)Operating profit before changes in operating assets/liabilities 41,583 27,249 21,122 8,530(Increase)/decrease in operating assets:Trading instruments 419 (1,742) 419 (1,742)Reserve deposit with Central Bank of Malta (1,823) (4,827) (1,823) (4,841)Loans and advances to banks with contractual maturity of over three months (4,952) (7,079) (4,952) (7,080)Loans and advances to customers (41,414) (52,911) (54,538) (71,273)Treasury Bills with contractual maturity of over three months 42,144 30,701 42,144 30,700Cheques in course of collection (5,269) 1,179 (5,269) 1,179Other receivables (206) (1,261) (242) (1,610) Increase/(decrease) in operating liabilities:Amounts owed to banks with contractual maturity of over three months (22,999) 14,561 (22,999) 14,560Amounts owed to customers 67,563 25,735 73,962 27,297Other payables 2,444 4,670 3,002 1,865Net cash from/(used in) operating activities before tax 77,490 36,275 50,826 (2,415)Tax paid (9,784) (10,412) (8,953) (9,504)Net cash flows from/(used in) operating activities 67,706 25,863 41,873 (11,919)Cash flows from investing activitiesDividends received 397 323 14,798 3,887Interest received from financial instruments designated at fair value through profit or loss 2,399 1,605 - -Interest received from available-for-sale debt and other fixed income instruments 6,821 5,083 6,821 5,083Interest received from held-to-maturity debt and other fixed income instruments 4,978 7,429 6,328 8,802Proceeds on disposal of financial instruments designated at fair value through profit or loss 9,454 4,031 - -Proceeds on disposal of available-for-sale instruments 15,498 10,814 15,354 5,224Proceeds on maturity of held-to-maturity debt and other fixed income instruments 41,707 70,488 41,707 70,488Proceeds on disposal of property, plant and equipment 264 57 255 47Purchase of financial instruments designated at fair value through profit or loss (21,506) (23,319) - -Purchase of available-for-sale instruments (37,330) (35,332) (37,330) (30,764)Purchase of held-to-maturity debt and other fixed income instruments - (57,805) - (57,805)Purchase of property, plant and equipment and investment property (2,143) (1,290) (1,553) (1,244)Purchase of intangible assets (712) (86) (421) (81)Purchase of shares in subsidiary companies - - (1,500) -Net cash flows from/(used in) investing activities 19,827 (18,002) 44,459 3,637Cash flows from financing activitiesDividends paid (28,525) (18,827) (28,525) (18,827)Maturity of subordinated loan stock (19,914) - (20,000) -Issue of units to minority interest 321 - - -Cash used in financing activities (48,118) (18,827) (48,525) (18,827)Increase/(decrease) in cash and cash equivalents 39,415 (10,966) 37,807 (27,109)Effect of exchange rate changes on cash and cash equivalents 2,558 (1,139) 2,558 (1,139)Net increase/(decrease) in cash and cash equivalents 36,857 (9,827) 35,249 (25,970) 39,415 (10,966) 37,807 (27,109)Cash and cash equivalents at beginning of year 97,053 108,019 138,108 165,217Cash and cash equivalents at end of year 136,468 97,053 175,915 138,108 Segmental Information a Class of business Personal Commercial Corporate, Investment Total Financial Services Banking Banking and Markets 2005 2004 2005 2004 2005 2004 2005 2004 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000Group Profit before taxSegment operating income 33,732 29,606 23,517 22,136 11,379 8,358 68,628 60,100Segment impairment allowances (507) 107 649 3,905 - - 142 4,012Common costs (32,064) (31,259) Profit before tax 36,706 32,853 Assets Segment total assets 577,333 476,124 610,844 653,122 462,518 469,900 1,650,695 1,599,146 Average total assets 526,728 444,835 631,983 648,577 466,209 475,653 1,624,920 1,569,065 Total equity 38,261 39,451 79,806 82,069 13,634 12,933 131,701 134,453 b Geographical segments The group's activities are carried out within Malta. There are no identifiable geographical segmentsor other material concentrations. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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