Results
The bank and its subsidiaries (‘the local group’), reported a profit before tax for the year ended 31 December 2025 of €109.0 million. This
represents a decrease of 29% when compared to prior year, reflecting the impact of a lower interest rate environment and reduced recoveries
on expected credit losses. Operating costs increased during the year primarily as a result of continued strategic investment in technology and
our people, aimed at strengthening the local group’s long term capabilities.
Profit attributable to shareholders amounted to €71.6 million, resulting in earnings per share of 19.9 cents compared with 27.8 cents in 2024.
The bank’s capital ratios improved with CET1 increasing from 22.6% to 24.1% and the total capital ratio increasing from 25.6% to 27.1%. This
improvement in the capital position was primarily driven by profits generated during the year, together with higher revaluation reserves on our
Hold-to-Collect and Sell investment portfolio. The bank continues to maintain a strong capital base and remains fully compliant with the
regulatory capital requirements.
While we remain focused on further strengthening our capital position, we also recognise the importance of delivering sustainable returns to our
shareholders. Accordingly, the Board has thus recommended a dividend pay-out ratio of 60% on reported profits. The proposed final gross
dividend will be 8.4 cents per share (5.5 cents per share net of tax), subject to shareholders’ approval at the Annual General Meeting.
Our regulatory environment
During the course of 2025, 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. The bank’s business model remained aligned with 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 proactive and transparent manner, covering various risk
themes and assessments, including conduct related themes, internal governance and compliance. During this period, regulatory engagement
was mainly focused on ensuring that governance and compliance 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 continue to ensure compliance with all EU rules and regulations including in
relation to payments, particularly the Instant Payments Regulation, as well as the Capital Requirements Regulation III/Capital Requirements
Directive VI.
Throughout 2025, 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 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 processes.
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 NGOs and seek to target specific challenges and opportunities to help unlock finance at
scale. 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 pillars 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.
With regard to this pillar, in 2025, the bank was recognised for the project “Maximising Energy Efficiency Through Building Renovation”, an
HSBC case study carried out in conjunction with The Malta Chamber. The bank was the winner for the ESG Positive Impact Award in the first
edition of the Sustainable Development Action Awards organised by The Ministry for the Environment, Energy and Public Cleanliness. This
initiative was aimed at recognising outstanding contributions to sustainability across Malta.
The bank and the HSBC Malta Foundation have been working on environmental projects for the last 26 years.
– 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).
– Local Projects.
Through these pillars, we 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.
