Results
The reported profit before tax for the year ended 31 December 2024 was €154.5m, reflecting a 15% growth (equivalent to €20.6m) when
compared to prior year. The bank’s improvement in performance was driven by an increase in revenue across all businesses, release of
expected credit losses and higher profits from the insurance subsidiary. Operating cost increased mainly driven by investment in technology,
people and real estate.
Profit attributable to shareholders amounted to €100.1m, resulting in earnings per share of 27.8 cent compared with 24.1 cent in 2023.
The bank’s capital ratios improved with CET1 increasing from 20.6% to 22.6% and the total capital ratio increasing from 23.5% to 25.6%. This
improvement was driven by increased profits for the year, higher revaluation reserves on our Hold-to-Collect and Sell investment portfolio and
lower capital deductions for non-performing loans. The bank continues to maintain a strong capital base and is fully compliant with the regulatory
capital requirements.
While we continue to strengthen our capital base, we recognise the importance of paying dividends to our shareholders. The Board has thus
recommended a dividend pay-out ratio of 51% on reported profits.
The proposed final gross dividend will be 12.0 cents per share (7.8 cents per share net of tax).
More details on the financial results can be found in the CEO’s review.
Our regulatory environment
During the course of 2024, the focus on prudential risk management by the regulatory and supervisory authorities continued, focusing mainly on
the bank’s internal governance and risk management activities as well as credit risk. The bank’s business model remained aligned to the
principle of sustainable growth, strict but safer prudential risk buffers, and robust compliance standards.
The regulatory engagement with the bank’s principal regulators has continued in a transparent manner, covering various risk themes and
assessments, including internal governance, which was undertaken as a result of the European Central Bank’s direct supervision and its
supervisory priorities. During this period, regulatory engagement was mainly focused on ensuring that governance and prudential risk
management structures, procedures and internal controls are operating effectively. This work continues to be pivotal to the regulators’
supervisory evaluation process.
Throughout the year, there have been material developments to ensure compliance with new EU Regulations in relation to payments, namely,
Instant Payments, as well as the Digital Operational Resilience Act.
Throughout 2024, the bank remained in close engagement with regulators and industry bodies during the consultation and ongoing
implementation processes of other regulatory changes. The bank will continue to observe and monitor all of the upcoming relevant regulatory
developments in order to fully adhere to its legal and regulatory obligations, and to contribute to the European and local jurisdiction’s evolving
regulatory agenda and consultation process.
Our responsibility towards the community
Through the HSBC Malta Foundation, the bank seeks to engage with numerous stakeholders in the community, contributing to a sustainable
future. Philanthropy contributes to the efforts in addressing climate change issues. Since 2024, we have directed our philanthropy funding to
Non-Governmental Organisations (‘NGOs’) partners supporting projects that have the potential to make significant impacts towards achieving a
net zero, resilient and sustainable future. We work with both global and local NGOs and seek to target specific challenges and opportunities to
help unlock finance at scale (Net Zero Transition Plan 2024). The philanthropy strategy has been designed to align with the organisation’s
strategic pillars of ‘transition to net zero’ (‘E’) and building inclusion and resilience’ (‘S’). The aim is to support initiatives for public good, that do
not generate commercial benefits, perceived or actual, for HSBC.
The main initiatives are:
– Net Zero Transition (‘NZT’): Supporting the global transition to net zero through acceleration and scaling of low carbon technologies,
addressing barriers to finance mobilisation, advance climate innovation and nature-based solutions.
– Inclusion & Resilience (‘I&R’): Investing in future skills, building financial capabilities, enhancing employability and entrepreneurship, and
supporting vulnerable communities thereby advancing social inclusion (age, abilities, gender, ethnicity, sexual and socio-economic
background).
– Disaster Relief: Addressing natural calamities and humanitarian crisis.
We also remain committed to making a difference in other areas, such as, but not limited to, youth education and the protection of our
environment and heritage. We take pride in encouraging HSBC colleagues who contribute to charities and causes that they feel passionate
about. In this regard, we grant all our employees a paid day to volunteer for work in the community. The Foundation is, furthermore, immensely
grateful for the support and guidance of our highly experienced HSBC Malta Foundation Board members.
