FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of February, 2007
HSBC Holdings plc
42nd Floor, 8 Canada
Square, London E14 5HQ, England
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F).
Form 20-F X Form 40-F ......
(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934).
Yes....... No X
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- ..............)
The following is the text of an announcement which is to be published in the
press in Malta on 17 February 2007 by HSBC Bank Malta p.l.c., a 70.03 per cent
indirectly held subsidiary of HSBC Holdings plc.
HSBC Bank Malta p.l.c. Preliminary Profit Statement
for the year ended 31 December 2006
The preliminary profit statement is published pursuant to Listing Rule 9.39 of
the MFSA Listing Authority and Article 4 (2) (b) of the Prevention of Financial
Markets Abuse (Disclosure and Notification) Regulations, 2005. Figures have been
extracted from HSBC Bank Malta p.l.c.'s Annual Report and Accounts which have
been audited by KPMG.
These financial statements have been prepared and presented in accordance with
the provisions of the Banking Act, 1994 and the Companies Act, 1995 which
requires adherence to International Financial Reporting Standards.
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 2006 was EUR1 =
Lm0.4293. The US dollar and sterling exchange rates ruling on the same day were
US$1 = Lm0.3258 and GBP1 = Lm0.6397. Average exchange rates for 2006 for euro,
US dollar and sterling were EUR1 = Lm0.4293, US$1= Lm0.3418 and GBP1 = Lm0.6296.
Review of Performance
During the year ended 31 December 2006, HSBC Bank Malta p.l.c. and its
subsidiaries generated a profit before tax on ordinary activities of Lm41.4
million, an increase of Lm4.7 million, or 12.8 per cent compared with 2005.
Profit attributable to shareholders was Lm26.8 million, an increase of Lm2.8
million, or 11.4 per cent, over prior year figures.
Earnings per share increased to 9.2 cents from a 2005 figure of 8.2 cents, with
the pre-tax return on average shareholders' funds increasing to 32.1 per cent
from 27.6 per cent in 2005.
Net interest income grew by 5.4 per cent over the prior year and contributed
Lm47.0 million to total operating income driven by growth in lending volumes of
10 per cent. Principal areas of growth in the lending portfolios were in the
higher yielding personal and non-public sector customer segments and with a
reduction in lower yielding public sector debt. This was partly offset by a
higher interest rate environment for new customer deposits which pushed up
interest payable costs.
Non-interest income levels grew by 18.8 per cent, contributing Lm28.6 million to
total operating income. Net fees and commissions grew by 14.7 per cent as
transactional activity on credit card payments and debit card EPOS machine usage
grew substantially; funds under management, stockbroking sales and life
assurance business also grew significantly.
Against a background of stronger income flows, operating expenses were Lm34.3
million, an increase of Lm2.3 million over prior year figures. Employee
compensation grew by 5.5 per cent, driven largely by performance-related pay
benefits due to the higher sales and profits of the bank. Whilst general
expenses increased by Lm1.0 million, there were significant investments in
infrastructure and branch network, which substantially improved automation and
operational efficiencies. This has enabled the bank to absorb larger volumes of
business and positioned it for future growth.
As a result, the group's cost to income ratio improved to 45.5 per cent from
46.7 per cent in 2005.
Total assets increased by Lm231.4 million to Lm1,887.3 million.
Loans and advances to customers increased by Lm110.0 million, supported by
growth in both the personal and commercial sectors. New product lines were
introduced with a diversification in mortgage product choice as well as new
financing proposals for the SME and larger corporate markets. Credit quality
remained sound.
Advances to deposits ratio increased to 76.3 per cent from a prior year end
level of 74.3 per cent.
Amounts owed to customers increased by Lm108.2 million to Lm1,475.5 million
driven by competitive pricing and the investment in automated bank channels
which strengthened the growth in deposit volumes and contributed to
significantly higher transaction activity.
The capital solvency ratio was at 10.9 per cent.
Shaun Wallis, Director and Chief Executive Officer of HSBC Bank Malta p.l.c.
said: "2006 has been a record year for HSBC Bank Malta p.l.c. with record sales
volumes across all product groups, record customer service satisfaction levels
and strong staff engagement levels, all contributing to improved financial
results.
"We achieved this by having a clear customer focus, by investing in our staff
and upgrading our systems. We have also benefited from being able to leverage
the HSBC brand.
"With good customer relationships, strong, recurrent business streams, excellent
resources and the backing of the HSBC Group, we are confident we will continue
to grow our business successfully and in a sustainable manner and remain Malta's
leading provider of financial services."
The Board is recommending to the Annual General Meeting to be held on 19 April
2007 a final ordinary dividend of 5.3 cents gross per share and a special
dividend of 5.3 cents gross per share, giving a total final dividend of 10.6
cents gross per share scheduled to be paid on 21 April 2007. The total final
dividend will be payable to shareholders on the bank's register as at 2 March
2007. This, together with the interim dividend of 5.3 cents gross, produces a
total dividend for the year of 15.9 cents gross.
HSBC Bank Malta p.l.c. is a member of the HSBC Group, whose ultimate parent
company is HSBC Holdings plc. Headquartered in London, HSBC Holdings plc is one
of the largest banking and financial services organisations in the world. The
HSBC Group's international network comprises over 9,500 offices in 81 countries
and territories in Europe, the Asia-Pacific region, the Americas, the Middle
East and Africa.
Income Statement for the year 1 January 2006 to 31 December 2006
Group Bank
2006 2005 2006 2005
Lm000 Lm000 Lm000 Lm000
Interest receivable and similar income
- on loans and advances, balances
with Central Bank of Malta and
Treasury Bills 72,103 60,994 71,285 58,048
- on debt and other fixed income
instruments 8,772 10,890 9,209 12,196
Interest payable (33,913) (27,327) (34,378) (27,648)
Net interest income 46,962 44,557 46,116 42,596
Fees and commissions receivable 13,848 11,866 10,831 9,342
Fees and commissions payable (1,175) (814) (987) (686)
Net fee and commission income 12,673 11,052 9,844 8,656
Dividend income 113 142 2,169 22,604
Trading profits 7,335 7,206 7,335 7,215
Net income from insurance financial
instruments designated at fair
value through profit or loss 4,768 11,169 - -
Net gains on sale of financial
investments 2,719 1,204 2,719 1,266
Net earned insurance premium 16,536 16,236 - -
Other operating income 2,308 723 715 24
Total operating income 93,414 92,289 68,898 82,361
Net insurance claims incurred and
movement in policyholders' liabilities (17,846) (23,661) - -
Net operating income 75,568 68,628 68,898 82,361
Employee compensation and benefits (21,249) (20,132) (20,357) (19,203)
General and administrative expenses (10,036) (9,075) (9,543) (8,527)
Depreciation (2,406) (2,197) (2,388) (2,157)
Amortisation of intangible assets (547) (635) (464) (556)
Other operating charges (109) (26) (9) (6)
Net operating income before impairment
reversals and provisions 41,221 36,563 36,137 51,912
Net impairment reversals 181 142 141 121
(Provisions)/reversals of provisions
for liabilities and other charges (7) 1 (7) 1
Profit before tax 41,395 36,706 36,271 52,034
Tax expense (14,572) (12,642) (12,366) (17,854)
Profit for the year 26,823 24,064 23,905 34,180
Profit attributable to shareholders
of the bank 26,810 24,057 23,905 34,180
Profit attributable to minority interest 13 7 - -
Earnings per share 9.2c 8.2c 8.2c 11.7c
Balance Sheet at 31 December 2006
Group Bank
2006 2005 2006 2005
Lm000 Lm000 Lm000 Lm000
Assets
Balances with Central Bank of
Malta, Treasury Bills and cash 130,569 77,121 130,569 77,118
Cheques in course of collection 10,535 9,727 10,535 9,727
Financial assets held for trading 10,396 3,907 10,399 3,907
Financial assets designated at
fair value through profit or loss 112,476 93,131 - -
Financial investments 168,138 224,500 168,123 254,468
Loans and advances to banks 256,060 162,882 256,042 202,332
Loans and advances to customers 1,126,126 1,016,084 1,126,126 937,813
Shares in subsidiary companies - - 9,682 20,350
Intangible assets 10,899 9,433 794 829
Property, plant and equipment 28,612 29,746 28,632 29,755
Investment property 3,417 961 2,456 -
Assets held for sale 3,978 4,918 4,042 5,864
Current tax recoverable 806 1,895 780 1,607
Deferred tax assets - - 724 -
Other assets 10,713 8,701 2,984 2,699
Prepayments and accrued income 14,589 12,868 13,630 12,945
Total assets 1,887,314 1,655,874 1,765,518 1,559,414
Liabilities
Financial liabilities held
for trading 10,643 4,050 10,693 4,050
Amounts owed to banks 126,328 22,667 126,328 22,667
Amounts owed to customers 1,475,450 1,367,214 1,487,906 1,381,683
Debt securities in issue - 12 - -
Deferred tax liabilities 4,606 3,843 - 349
Liabilities to customers
under investment contracts 9,153 8,297 - -
Liabilities under insurance
contracts issued 102,770 86,275 - -
Other liabilities 13,816 16,755 13,003 16,192
Accruals and deferred income 18,147 15,035 17,936 14,942
Provisions for liabilities and
other charges 32 25 32 25
Total liabilities 1,760,945 1,524,173 1,655,898 1,439,908
Equity
Called up share capital 36,480 9,120 36,480 9,120
Revaluation reserves 10,629 13,105 10,629 13,041
Other reserve 242 4,242 227 4,242
Retained earnings 79,018 104,906 62,284 93,103
Equity attributable to
shareholders 126,369 131,373 109,620 119,506
Minority interest - 328 - -
Total equity 126,369 131,701 109,620 119,506
Total liabilities and equity 1,887,314 1,655,874 1,765,518 1,559,414
Memorandum items
Contingent liabilities 59,578 51,513 59,588 51,523
Commitments 456,899 401,216 456,899 412,044
Statement of Changes in Equity for the year 1 January 2006 to 31 December 2006
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 Lm000
Group
At 1 January 2005 9,120 11,473 4,242 109,419 134,254 - 134,254
Release 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 - 757
Release of revaluation
reserve on disposal
of property - 30 - (45) (15) - (15)
Movement in deferred tax on
revaluation of property - 1,628 - - 1,628 - 1,628
Income and expenses
recognised directly
in equity - 1,632 - (45) 1,587 - 1,587
Share capital of subsidiary - - - - - 321 321
Profit for the year - - - 24,057 24,057 7 24,064
Dividends - - - (28,525) (28,525) - (28,525)
At 31 December 2005 9,120 13,105 4,242 104,906 131,373 328 131,701
At 1 January 2006 9,120 13,105 4,242 104,906 131,373 328 131,701
Release of net gains on
available-for-sale assets
transferred to the income
statement on disposal - (796) - (973) (1,769) - (1,769)
Net fair value adjustments
on investments - (1,668) - - (1,668) - (1,668)
Release of revaluation
reserve on disposal
of property - (12) - 18 6 - 6
Income and expenses
recognised directly
in equity - (2,476) - (955) (3,431) - (3,431)
Share capital of subsidiary - - - - - 91 91
Disposal of subsidiary
company - - - - - (432) (432)
Bonus share issue 27,360 - (4,242) (23,118) - - -
Profit for the year - - - 26,810 26,810 13 26,823
Share-based payments - - 242 493 735 - 735
Dividends - - - (29,118) (29,118) - (29,118)
At 31 December 2006 36,480 10,629 242 79,018 126,369 - 126,369
Called up
share Revaluation Other Retained Total
capital reserves reserve earnings equity
Lm000 Lm000 Lm000 Lm000 Lm000
Bank
At 1 January 2005 9,120 11,479 4,242 87,493 112,334
Release of net gains on
available-for-sale assets
transferred to the income
statement on disposal - (823) - - (823)
Net fair value adjustments
on investments - 727 - - 727
Release of revaluation
reserve on disposal of
properties - 30 - (45) (15)
Movement in deferred tax on
revaluation of property - 1,628 - - 1,628
Income and expenses
recognised directly
in equity - 1,562 - (45) 1,517
Profit for the year - - - 34,180 34,180
Dividends - - - (28,525) (28,525)
At 31 December 2005 9,120 13,041 4,242 93,103 119,506
At 1 January 2006 9,120 13,041 4,242 93,103 119,506
Release of net gains on
available-for-sale assets
transferred to the income
statement on disposal - (796) - (973) (1,769)
Net fair value adjustments
on investments - (1,604) - - (1,604)
Release of revaluation reserve
on disposal of properties - (12) - 18 6
Income and expenses
recognised directly
in equity - (2,412) - (955) (3,367)
Bonus share issue 27,360 - (4,242) (23,118) -
Effect of amalgamation of
subsidiary - - - (1,995) (1,995)
Profit for the year - - - 23,905 23,905
Share-based payments - - 227 462 689
Dividends - - - (29,118) (29,118)
At 31 December 2006 36,480 10,629 227 62,284 109,620
Cash Flow Statement for the year 1 January 2006 to 31 December 2006
Group Bank
2006 2005 2006 2005
Lm000 Lm000 Lm000 Lm000
Cash flows from operating
activities
Interest and commission
receipts 112,416 103,910 87,824 77,419
Interest and commission
payments (36,601) (30,381) (33,491) (28,359)
Payments to employees and
suppliers (31,952) (29,547) (28,770) (27,938)
Operating profit before
changes in operating
assets/liabilities 43,863 43,982 25,563 21,122
(Increase)/decrease in
operating assets:
Trading instruments (19,451) (11,329) (724) 419
Reserve deposit with
Central Bank of Malta (6,618) (1,823) (6,618) (1,823)
Loans and advances to
customers and banks (198,898) (46,366) (203,229) (59,490)
Treasury Bills with
contractual maturity of
over three months (12,089) 42,144 (12,089) 42,144
Other receivables (1,035) (5,475) (1,070) (5,511)
Increase/(decrease) in
operating liabilities:
Customer accounts and
amounts owed to banks 198,053 44,564 196,360 50,963
Other payables (2,397) 2,444 (2,674) 3,002
Net cash from/(used in)
operating activities
before tax 1,428 68,141 (4,481) 50,826
Tax paid (10,976) (9,784) (10,840) (8,953)
Net cash flows (used in)/
from operating
activities (9,548) 58,357 (15,321) 41,873
Cash flows from investing
activities
Dividends received 74 93 1,874 14,798
Interest received from
financial investments 11,333 11,799 11,752 13,149
Proceeds from sale and
maturity of financial
investments 88,891 57,205 118,877 57,061
Proceeds on sale of
property, plant
and equipment and
intangible assets 80 264 80 255
Purchase of financial
investments (37,851) (37,330) (37,851) (37,330)
Purchase of property,
plant and equipment,
investment property
and intangible assets (2,311) (2,855) (2,289) (1,974)
Proceeds on sale of shares
in subsidiary company 450 - 450 -
Purchase of shares in
subsidiary companies - - - (1,500)
Net cash flows from
investing activities 60,666 29,176 92,893 44,459
Cash flows from financing
activities
Dividends paid (29,118) (28,525) (29,118) (28,525)
Decrease in debt
securities in issue (12) - - -
Maturity of subordinated
loan stock - (19,914) - (20,000)
Issue of units to minority
interest 91 321 - -
Cash used in financing
activities (29,039) (48,118) (29,118) (48,525)
Effect of amalgamation
of subsidiary company
on cash and cash
equivalents - - (65,840) -
Increase/(decrease) in
cash and cash
equivalents 22,079 39,415 (17,386) 37,807
Effect of exchange rate
changes on cash and
cash equivalents (7,014) 2,558 (7,014) 2,558
Net increase/(decrease)
in cash and cash
equivalents 29,093 36,857 (10,372) 35,249
22,079 39,415 (17,386) 37,807
Cash and cash equivalents
at beginning of year 136,468 97,053 175,915 138,108
Cash and cash equivalents
at end of year 158,547 136,468 158,529 175,915
Segmental Information
a Class of business
Corporate,
Personal Commercial Investment Banking
Financial Services Banking and Markets Total
2006 2005 2006 2005 2006 2005 2006 2005
Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000
Group
Profit before tax
for the year
ended 31
December
Segment operating
income 38,552 33,732 26,592 23,517 10,424 11,379 75,568 68,628
Segment
impairment
allowances (144) (507) 325 649 - - 181 142
Common costs (34,354) (32,064)
Profit before tax 41,395 36,706
Assets at 31
December
Segment total
assets 679,457 582,512 651,948 610,844 555,909 462,518 1,887,314 1,655,874
Average total
assets 630,984 526,728 631,396 631,983 509,214 466,209 1,771,594 1,624,920
Total equity
at 31 December 37,191 38,261 77,605 79,806 11,573 13,634 126,369 131,701
b Geographical segments
The group's activities are carried out within Malta. There are no identifiable
geographical segments or other material concentrations.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HSBC Holdings plc
By:
Name: P A Stafford
Title: Assistant Group Secretary
Date: 16 February 2007