HSBC Bank Malta p.l.c.
Annual Report and Accounts 2023
The HSBC Group 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 is spread across 64 countries and territories in Europe, Asia, North America, Latin America, and the Middle East and North Africa. |
HSBC Bank Malta p.l.c. Registered in Malta: C3177 Registered Office and Head Office: 116 Archbishop Street Valletta VLT 1444 Malta Telephone: 356 2380 2380 www.hsbc.com.mt HSBC Holdings plc Registered Office and Group Head Office: 8 Canada Square London E14 5HQ United Kingdom Telephone: 44 020 7991 8888 www.hsbc.com |
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 | John Bonello, CHAIRMAN AND NON-EXECUTIVE DIRECTOR Appointed Director of the bank in July 2013 and Chairman in August 2019. Member of the bank’s Remuneration and Nomination Committee, former Chairman of the bank’s Audit Committee and former Member of the bank’s Risk Committee. Mr Bonello is a Chartered Accountant and a Certified Public Accountant. He was formerly the Chairman and Senior Partner of PricewaterhouseCoopers in Malta from where he retired in December 2009. He is a Fellow of the Malta Institute of Accountants, Chairman of the Disciplinary Committee of the Institute and a Member of the Joint Disciplinary Board of the Accountancy Board. He is also a fellow member of the Institute of Chartered Accountants in England and Wales. | |
Geoffrey Fichte, EXECUTIVE DIRECTOR and CHIEF EXECUTIVE OFFICER Appointed CEO and Executive Director of HSBC Bank Malta p.l.c. in May 2023. He is also Chairman of HSBC Life Assurance (Malta) Ltd and HSBC Global Asset Management (Malta) Limited. Mr Fichte has over 20 years of experience in financial services: banking, insurance, asset management and global strategy across Hong Kong, London, New York and Mexico City. He previously held several senior international positions within the HSBC Group, including President and CEO of HSBC Bank Uruguay, Head of Business Banking, HSBC Mexico; Senior Executive, Corporate Development & Global Strategy, HSBC Group, London; and Senior Manager International (Asia), Hong Kong. He holds a Bachelor of Science in Economics from Wharton School, University of Pennsylvania, Philadelphia, USA. |
 | Michel Cordina, EXECUTIVE DIRECTOR Appointed Executive Director in April 2019. Mr Cordina, formerly Head of Commercial Banking, is presently Head of Business Development and also heads the bank’s Corporate Sustainability arm and is the Deputy Chair of the HSBC Foundation. Mr Cordina is a seasoned banker and has a wealth of experience having started his banking career 42 years ago. He has worked in various areas of banking in both Personal Banking and Commercial Banking. He has also led a number of operational and support functions of the bank. He has occupied various executive roles within HSBC Bank Malta including Deputy Head of Operations and Head of Business Transformation. He was also the Programme Manager on a number of key projects executed by the bank. In 2010, he was seconded to HSBC Commercial Banking in London where he performed the role of Head of Sales Performance. He is an Associate of the Chartered Institute of Bankers (‘ACIB’). |
Alexiei Dingli, NON-EXECUTIVE DIRECTOR Appointed Director of the bank in January 2024. Presently Member of the bank’s Risk Committee. He is a Professor of Artificial Intelligence (AI) at the University of Malta. He has been conducting research and working in the field of AI for more than two decades, assisting different companies to implement AI solutions. His work has been rated World Class by international experts and he has won various local and international awards. He has also published several peer-reviewed publications and formed part of the Malta AI task-force which was setup by the Maltese government, aimed at making Malta one of the top AI countries in the world. He is a B.Sc.IT (honours) graduate, which degree was obtained in 2001, from the University of Malta, has a Ph.D in Artificial Intelligence from the University of Sheffield, UK and an MBA in Technology Management from the Grenoble Business School, France. |  |
 | Ingrid Azzopardi, NON-EXECUTIVE DIRECTOR Appointed Director of the bank in August 2019. She is a Chartered Director and is the Chairperson of the bank’s Audit Committee and Member of the bank’s Risk Committee. A former Director of HSBC Life Assurance (Malta) Ltd and former Chairperson of the Audit and Risk Committee of said company. Ms Azzopardi is presently the Group Internal Auditor of GO p.l.c., a position she has occupied since November 2000. She also leads GO Green and sits on the Board of Administrators of the Malta ESG Alliance. She has chaired various committees at GO p.l.c., including the Group Fraud Forum and the Gender Equality Committee. She holds a certificate in Business Sustainability Management from the University of Cambridge. She is a Certified Public Accountant and Auditor, a Fellow of the Malta Institute of Accountants, a Fellow of the UK Institute of Directors, and also a Member of the Institute of Internal Auditors - Malta Chapter. |
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Maria Micallef, NON-EXECUTIVE DIRECTOR Appointed as Director in December 2022. Currently, Ms Micallef is the Chairperson of the bank’s Remuneration and Nomination Committee, and Member of the bank’s Audit Committee. She was the Managing Partner at RSM Malta until her retirement in December 2020. Ms Micallef specialised in business advisory services including mergers and acquisitions, corporate finance, valuations and investment appraisals. She is a visiting lecturer at the University of Malta. Currently Ms Micallef is pursuing a Degree in Humanities at the same University. Ms Micallef has a B.A. Hons Accountancy degree and is a Certified Public Accountant. She is a fellow of the Malta Institute of Accountants, a member of the US Institute of Internal Auditors and a member of the Association of Certified Fraud Examiners. Ms Micallef served as President of the Malta Institute of Accountants during the period 2013 to 2015. |  |
 | Manfred Galdes, NON-EXECUTIVE DIRECTOR Appointed Director of the bank in January 2021. Dr Galdes is the Chairman of the bank’s Risk Committee. He is the managing partner of the ARQ Group, a multi-disciplinary advisory firm. After graduating as a lawyer (LL.D.) from the University of Malta, he obtained a Masters Degree (LL.M.) in European (Commercial) Law at the University of Leicester. Dr Galdes has spent the last 23 years practicing in the area of regulatory and financial crime compliance having held various leading roles both in the private and public sector. Between 2008 and 2016, Dr Galdes headed the FIAU, Malta’s financial intelligence unit and principal AML/CFT supervisory authority. |
Terecina Kwong, NON-EXECUTIVE DIRECTOR Appointed as Director in December 2022. Ms Kwong started her career at the HSBC Group via the Hong Kong Management Associate Programme in 2000. She has held several senior positions within HSBC including Global Head of Channels Distribution, Global Commercial Banking Chief Risk and Administration Officer, Global Control Office Chief Operating Officer and Head of Centre of Excellence, Group Head of Operational Management and Chief Operating Office at HSBC China. She is currently HSBC Global Chief Operating Officer for retail banking, and a Non-Executive Director of HSBC Armenia. In 1997 she obtained a Bachelor of Arts Degree (Economics) from the University of British Columbia, Vancouver, Canada. In 1999 she graduated with Master of Business Administration from the Chinese University of Hong Kong. She also graduated in 2007 with a Bachelor of Law from the University of London and is a Fellow CPA, CPA Australia. |  |
 | Paula Mamo, COMPANY SECRETARY Company Secretary of HSBC Bank Malta p.l.c. since May 2022. Dr Mamo joined the bank in February 2018 as Deputy Company Secretary supporting the Company Secretary. She was appointed Company Secretary for the two subsidiary companies of the bank, HSBC Life Assurance (Malta) Ltd and HSBC Global Asset Management (Malta) Limited in May 2018. Prior to joining HSBC, Dr Mamo progressed through a number of roles primarily within legal, regulatory compliance and financial crime compliance, with other licensed financial institutions. She graduated as Doctor of Laws from the University of Malta in 2010. |
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Geoffrey Fichte, EXECUTIVE DIRECTOR AND CHIEF EXECUTIVE OFFICER Appointed CEO and Executive Director of HSBC Bank Malta p.l.c. in May 2023. He is also Chairman of HSBC Life Assurance (Malta) Ltd and HSBC Global Asset Management (Malta) Limited. Mr Fichte has over 20 years of experience in financial services: banking, insurance, asset management and global strategy across Hong Kong, London, New York and Mexico City. He previously held several senior international positions within the HSBC Group, including President and CEO of HSBC Bank Uruguay, Head of Business Banking, HSBC Mexico; Senior Executive, Corporate Development & Global Strategy, HSBC Group, London; and Senior Manager International (Asia), Hong Kong. He holds a Bachelor of Science in Economics from Wharton School, University of Pennsylvania, Philadelphia, USA. | ||
Svetlana Maslova, CHIEF OPERATING OFFICER Ms Maslova joined HSBC Bank Malta p.l.c. in July 2023. She has 15 years’ experience with the Group and has worked in several Group entities across Europe and Asia. Svetlana has held a number of key roles in Retail and Wealth Management and Digital Business Services, and previously worked in Malta for 8 years. Svetlana holds a Bachelor’s Degree in Philology and English Language. She also holds certificates for Financial Advice and Management Accounting. Through HSBC, Svetlana is also an accredited career coach. |  |
 | Charlotte Cilia, CHIEF FINANCIAL OFFICER Appointed Chief Financial Officer in December 2020. Mrs Cilia is a certified public accountant and auditor with over 20 years of varied experience across audit and banking finance. She joined the HSBC Finance team as a senior manager in 2010 where she worked for four years and re-joined the bank in 2018 as Chief Accounting Officer and Deputy Chief Financial Officer. She served as Deputy Chief Financial Officer during her four years at MeDirect Group until 2018. Previously an auditor at KPMG in Malta and the UK where she performed key roles on various international engagements. She is a Director on the Board of HSBC Life Assurance (Malta) Ltd. |
Muriel Rutland, Designate HEAD OF WEALTH AND PERSONAL BANKING Ms Rutland’s appointment as Head of Wealth and Personal Banking will be effective upon receipt of regulatory approval. During her 22-year career with HSBC Malta, she has built extensive experience in the WPB business through various senior management positions including CEO of HSBC Life Insurance (Malta) Limited, WPB Chief Operating Officer and Managing Director of HSBC Global Asset Management (Malta) Limited. She graduated in Bachelor of Commerce Honours in Banking & Finance from the University of Malta in 2001. |  |
 | Michel Cordina, EXECUTIVE DIRECTOR AND HEAD OF BUSINESS DEVELOPMENT Appointed Executive Director in April 2019. Mr Cordina, formerly Head of Commercial Banking, is presently Head of Business Development and also heads the bank’s Corporate Sustainability arm and is the Deputy Chair of the HSBC Foundation. Mr Cordina is a seasoned banker and has a wealth of experience having started his banking career 42 years ago. He has worked in various areas of banking in both Personal Banking and Commercial Banking. He has also led a number of operational and support functions of the bank. He has occupied various executive roles within HSBC Bank Malta including Deputy Head of Operations and Head of Business Transformation. He was also the Programme Manager responsible for bringing the HSBC Contact Centre to Malta. In 2010, he was seconded to HSBC Commercial Banking in London where he performed the role of Head of Sales Performance. He is an Associate of the Chartered Institute of Bankers (‘ACIB’). |
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 | Jesmond Apap, HEAD OF GLOBAL MARKETS Appointed Head of Global Markets in April 2020. Joined the bank in 1989, then Mid-Med Bank. During his career Mr Apap has held a number of key roles that have seen him successfully drive transformation and performance. Mr Apap started his career in Operations before moving to Markets. Prior to his role as Head of Global Markets, Mr Apap headed Markets Treasury, managing cash, liquidity, funding and the structural interest rate risk for the bank. |
David Perotti, HEAD OF HUMAN RESOURCES Mr Perotti was appointed Head of Human Resources in August 2023. He has 42 years’ experience in banking, 25 of which within virtually all areas in HR. During the past few years, David has headed Employee & Industrial Relations for HBMT, working closely with our union stakeholders. He is an active member of HSBC’s Global Employee Relations (ER) Forum and has supported Regional ER on a number of important projects. |  |
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Steven Beddow, CHIEF RISK OFFICER Mr Beddow was appointed Chief Risk Officer in November 2022. Mr Beddow holds a Bachelor and Master’s Degree from the University of Oxford in Modern Languages. He has over 20 years of experience within the HSBC Group and has worked in a number of locations across Europe, Asia, the Middle East and the Americas. Mr Beddow has previously held a number of banking related Director positions, served on different country level executive committees, led transformation work, and co-sponsored a country level diversity and inclusion committee. He is passionate about staff development and mentoring. |  |
 | Joseph Sammut, GENERAL COUNSEL Appointed General Counsel in July 2016. Joined the bank in 1981, then Mid-Med Bank, and subsequently read law at the University of Malta, where he graduated in 1988. Dr Sammut obtained his postgraduate degree in European Law at the College of Europe in Bruges in 1989. At the bank’s Legal Office he worked for some years as a contracts lawyer and subsequently focused mainly on financial services. Since 1999, he was entrusted with leading the legal advice team and in 2010 worked at HSBC Head Office in London on a short-term legal assignment. He was appointed Deputy General Counsel in 2012. |
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Mandy Falzon, CHIEF COMPLIANCE OFFICER Appointed as Chief Compliance Officer in March 2021, leading the Regulatory Compliance and Financial Crime Compliance teams at HSBC Bank Malta p.l.c. She graduated as a Doctor of Laws from the University of Malta in 2005, and has 17 years’ experience in banking and financial services at HSBC. Dr Falzon held managerial positions within the HSBC Malta Legal Office prior to joining the Regulatory Compliance function in 2015 in a senior management position. She is a Director on the Board of HSBC Global Asset Management (Malta) Limited. |  |
 | Carine Arpa, HEAD OF COMMUNICATIONS Ms Arpa was appointed Head of Communications in January 2019, bringing over 15 years of experience in the fields of communications, marketing and media relations. Ms Arpa has undertaken a number of different roles in the course of her career, including leading communications and marketing campaigns for the National Euro Changeover Committee, the European Commission Representation in Malta, KPMG and EY. She holds a Bachelor of Arts in Psychology and Communication Studies (Honours), a Master's Degree in European Studies and an MBA (Henley). |
Paula Mamo, COMPANY SECRETARY Company Secretary of HSBC Bank Malta p.l.c. since May 2022. Dr Mamo joined the bank in February 2018 as Deputy Company Secretary supporting the Company Secretary. She was appointed Company Secretary for the two subsidiary companies of the bank, HSBC Life Assurance (Malta) Ltd and HSBC Global Asset Management (Malta) Limited in May 2018. Prior to joining HSBC, Dr Mamo progressed through a number of roles primarily within legal, regulatory compliance and financial crime compliance, with other licensed financial institutions. She graduated as Doctor of Laws from the University of Malta in 2010. |  |
 | Morgan Carabott, HEAD OF INTERNAL AUDIT In September 2021, the Bank announced the appointment of Morgan Carabott as Head of Internal Audit. Ms Carabott joined the Bank as Deputy Head of Internal Audit in 2018. Prior to joining the Bank she spent seven years as a Senior Internal Auditor within the Insurance industry and was an external auditor with one of the big four audit firms. Ms Carabott is a warranted Accountant and Auditor and is also a Certified Information Systems Auditor and Certified Anti-Money Laundering Specialist. She is a Fellow of the Malta Institute of Accountants and a member of the Information Systems Audit and Control Association (ISACA) and Association of Certified Anti-Money Laundering Specialists (ACAMS). She has strong auditing and risk management skills, sound industry and regulatory knowledge coupled with extensive experience in leading and managing numerous audits across different sectors. |
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Group Strategy | Our strategy supports our ambition of being the preferred international financial partner for our clients, centred around four key areas. | |||
Focus | Digitise | Energise | Transition | |
– Maintain leadership in the scale markets. – Double-down on international connectivity – Diversify our revenue – Maintain cost discipline and reshape our portfolio. | – Deliver seamless customer experiences. – Ensure resilience and security. – Embrace disruptive technologies and partners with innovators. – Automate and simplify at scale. | – Inspire leaders to drive performance and delivery. – Unlock our edge to enable success. – Deliver a unique and exceptional colleague experience. – Prepare our workforce for the future. | – Support our customers. – Embed net zero into the way we operate. – partner for systemic change. – Become net zero in our own operations and supply chain by 2030,and our financed emissions by 2050. | |
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2023 | 2022 | |
Profit before tax (reported) (€m) | 133.9 | 55.6 |
Profit before tax (adjusted) (€m) | 133.9 | 57.1 |
Cost efficiency ratio (reported) (%) | 44.2 | 68.4 |
Cost efficiency ratio (adjusted) (%) | 44.2 | 67.4 |
Post-tax return on equity (reported) (%) | 17.1 | 7.7 |
Post-tax return on equity (adjusted) (%) | 17.1 | 7.9 |
Common Equity Tier 1 ratio (%) | 20.6 | 18.5 |
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Total environmentally sustainable assets (Based on Turnover) | KPI Based on Turnover KPI of the counterparty | Total environmen tally sustainable assets (Based on CapEx) | KPI Based on CapEx KPI of the counterparty | % coverage (over total assets) | % of assets excluded from the numerator of the GAR (Article 7 (2) and (3) and Section 1.1.2. of Annex V) | % of assets excluded from the denominato r of the GAR (Article 7 (1)) and Section 1.2.4 of Annex V) | ||
€000 | % | €000 | % | % | % | % | ||
Main KPI | Green asset ratio (GAR) stock | |||||||
Total environmentally sustainable activities | KPI | KPI | % coverage (over total assets) | % of assets excluded from the numerator of the GAR (Article 7 (2) and (3) and Section 1.1.2. of Annex V) | % of assets excluded from the denominato r of the GAR (Article 7 (1)) and Section 1.2.4 of Annex V) | |||
€000 | % | €000 | % | % | % | % | ||
Additional KPIs | Financial guarantees | — | — | — | — | |||
Assets under management | ||||||||
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Disclosure reference date T | ||||||||||||||||
Total [gross] carry- ing amount | Climate Change Mitigation (CCM) | Climate Change Adaptation (CCA) | TOTAL (CCM + CCA) | |||||||||||||
of which: towards taxonomy relevant sectors (Taxonomy-eligible) | of which: towards taxonomy relevant sectors (Taxonomy-eligible) | |||||||||||||||
of which: environmentally sustainable (Taxonomy-aligned) | of which: environmentally sustainable (Taxonomy-aligned) | of which: environmentally sustainable (Taxonomy-aligned) | ||||||||||||||
of which: Use of Proce- eds | of which: trans- itional | of which: enab- ling | of which: Use of Proc- eeds | of which: enab- ling | of which: Use of Proc- eeds | of which: trans- itional | of which: enab- ling | |||||||||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | ||
GAR - Covered assets in both numerator and denominator | ||||||||||||||||
1 | Loans and advances, debt securities and equity instruments not HfT eligible for GAR calculation | 2,544,575 | — | — | — | — | — | — | — | 2,294,676 | — | — | — | — | ||
2 | Financial undertakings | 229,300 | — | — | — | — | — | — | — | 22,257 | — | — | — | — | ||
3 | Credit institutions | 229,300 | — | — | — | — | — | — | — | 22,257 | — | — | — | — | ||
4 | Loans and advances | 207,043 | — | — | — | — | — | — | — | — | — | — | — | — | ||
5 | Debt securities, including UoP | 22,257 | — | — | — | — | — | — | — | 22,257 | — | — | — | — | ||
6 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
7 | Other financial corporations | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
8 | – of which: investment firms | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
9 | Loans and advances | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
10 | Debt securities, including UoP | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
11 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
12 | – of which: management companies | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
13 | Loans and advances | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
14 | Debt securities, including UoP | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
15 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
16 | – of which: insurance undertakings | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
17 | Loans and advances | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
18 | Debt securities, including UoP | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
19 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
20 | Non-financial undertakings | 33,928 | — | — | — | — | — | — | — | 1,444 | — | — | — | — | ||
21 | Loans and advances | 33,928 | — | — | — | — | — | — | — | 1,444 | — | — | — | — | ||
22 | Debt securities, including UoP | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
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a | b | c | d | e | f | g | h | i | j | ab | ac | ad | ae | af | ||
Disclosure reference date T | ||||||||||||||||
Total [gross] carry- ing amount | Climate Change Mitigation (CCM) | Climate Change Adaptation (CCA) | TOTAL (CCM + CCA) | |||||||||||||
of which: towards taxonomy relevant sectors (Taxonomy-eligible) | of which: towards taxonomy relevant sectors (Taxonomy-eligible) | |||||||||||||||
of which: environmentally sustainable (Taxonomy-aligned) | of which: environmentally sustainable (Taxonomy-aligned) | of which: environmentally sustainable (Taxonomy-aligned) | ||||||||||||||
of which: Use of Proce- eds | of which: trans- itional | of which: enab- ling | of which: Use of Proc- eeds | of which: enab- ling | of which: Use of Proc- eeds | of which: trans- itional | of which: enab- ling | |||||||||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | ||
23 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
24 | Households | 2,160,409 | — | — | — | — | — | — | — | 2,150,436 | — | — | — | — | ||
25 | – of which: loans collateralised by residential immovable property | 2,137,020 | — | — | — | — | — | — | — | 2,137,020 | — | — | — | — | ||
26 | – of which: building renovation loans | 2,291 | — | — | — | — | — | — | — | 2,291 | — | — | — | — | ||
27 | – of which: motor vehicle loans | 21,098 | — | — | — | — | 11,125 | — | — | — | — | |||||
28 | Local governments financing | 117,717 | — | — | — | — | — | — | — | 117,717 | — | — | — | — | ||
29 | Housing financing | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
30 | Other local government financing | 117,717 | — | — | — | — | — | — | — | 117,717 | — | — | — | — | ||
31 | Collateral obtained by taking possession: residential and commercial immovable properties | 3,221 | — | — | — | — | — | — | — | 2,822 | — | — | — | — | ||
32 | Assets excluded from the numerator for GAR calculation (covered in the denominator) | 1,786,860 | — | — | — | — | — | — | — | — | — | — | — | — | ||
33 | Financial and Non-financial undertakings | 1,018,640 | ||||||||||||||
34 | SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations | 1,017,091 | ||||||||||||||
35 | Loans and advances | 726,008 | ||||||||||||||
36 | – of which: loans collateralised by commercial immovable property | 293,476 | ||||||||||||||
37 | – of which: building renovation loans | 4,679 | ||||||||||||||
38 | Debt securities | 291,040 | ||||||||||||||
39 | Equity instruments | 43 | ||||||||||||||
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Disclosure reference date T | ||||||||||||||||
Total [gross] carry- ing amount | Climate Change Mitigation (CCM) | Climate Change Adaptation (CCA) | TOTAL (CCM + CCA) | |||||||||||||
of which: towards taxonomy relevant sectors (Taxonomy-eligible) | of which: towards taxonomy relevant sectors (Taxonomy-eligible) | |||||||||||||||
of which: environmentally sustainable (Taxonomy-aligned) | of which: environmentally sustainable (Taxonomy-aligned) | of which: environmentally sustainable (Taxonomy-aligned) | ||||||||||||||
of which: Use of Proce- eds | of which: trans- itional | of which: enab- ling | of which: Use of Proc- eeds | of which: enab- ling | of which: Use of Proc- eeds | of which: trans- itional | of which: enab- ling | |||||||||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | ||
40 | Non-EU country counterparties not subject to NFRD disclosure obligations | 1,549 | ||||||||||||||
41 | Loans and advances | 629 | ||||||||||||||
42 | Debt securities | 920 | ||||||||||||||
43 | Equity instruments | — | ||||||||||||||
44 | Derivatives | 7,483 | ||||||||||||||
45 | On demand interbank loans | 518,531 | ||||||||||||||
46 | Cash and cash- related assets | 33,582 | ||||||||||||||
47 | Other categories of assets (e.g. Goodwill, commodities etc.) | 208,624 | ||||||||||||||
48 | Total GAR assets | 4,331,435 | — | — | — | — | — | — | — | 2,294,676 | — | — | — | — | ||
49 | Assets not covered for GAR calculation | 2,703,804 | ||||||||||||||
50 | Central governments and Supranational issuers | 1,439,811 | ||||||||||||||
51 | Central banks exposure | 1,257,899 | ||||||||||||||
52 | Trading book | 6,094 | ||||||||||||||
53 | Total assets | 7,035,239 | — | — | — | — | — | — | — | 2,294,676 | — | — | — | — | ||
Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations | ||||||||||||||||
54 | Financial guarantees | 10,279 | — | — | — | — | — | — | — | 3 | — | — | — | — | ||
55 | Assets under management | 395,000 | 2,294 | — | 880 | — | — | — | — | 8,623 | 2,294 | — | 880 | — | ||
56 | – of which: debt securities | 254,057 | 2,294 | — | 880 | — | — | — | — | 7,731 | 2,294 | — | 880 | — | ||
57 | – of which: equity instruments | 87,225 | — | — | — | — | — | — | — | 892 | — | — | — | — | ||
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 35 |
a | b | c | d | e | f | g | h | i | j | ab | ac | ad | ae | af | ||
Disclosure reference date T | ||||||||||||||||
Total [gross] carrying amount | Climate Change Mitigation (CCM) | Climate Change Adaptation (CCA) | TOTAL (CCM + CCA) | |||||||||||||
of which: towards taxonomy relevant sectors (Taxonomy-eligible) | of which: towards taxonomy relevant sectors (Taxonomy- eligible) | |||||||||||||||
of which: environmentally sustainable (Taxonomy-aligned) | of which: environmentally sustainable (Taxonomy-aligned) | of which: environmentally sustainable (Taxonomy-aligned) | ||||||||||||||
of which: Use of Proc- eeds | of which: trans- itional | of which: enab- ling | of which: Use of Proc- eeds | of which: enab- ling | of which: Use of Proc- eeds | of which: trans- itional | of which: enab- ling | |||||||||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | ||
GAR - Covered assets in both numerator and denominator | ||||||||||||||||
1 | Loans and advances, debt securities and equity instruments not HfT eligible for GAR calculation | 2,544,575 | — | — | — | — | — | — | — | 2,297,626 | — | — | — | — | ||
2 | Financial undertakings | 229,300 | — | — | — | — | — | — | — | 22,257 | — | — | — | — | ||
3 | Credit institutions | 229,300 | — | — | — | — | — | — | — | 22,257 | — | — | — | — | ||
4 | Loans and advances | 207,043 | — | — | — | — | — | — | — | — | — | — | — | — | ||
5 | Debt securities, including UoP | 22,257 | — | — | — | — | — | — | — | 22,257 | — | — | — | — | ||
6 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
7 | Other financial corporations | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
8 | – of which: investment firms | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
9 | Loans and advances | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
10 | Debt securities, including UoP | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
11 | Equity | — | — | — | — | — | — | — | — | — | — | |||||
12 | – of which: management companies | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
13 | Loans and advances | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
14 | Debt securities, including UoP | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
15 | Equity | — | — | — | — | — | — | — | — | — | — | |||||
16 | – of which: insurance undertakings | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
17 | Loans and advances | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
18 | Debt securities, including UoP | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
19 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
20 | Non-financial undertakings | 33,928 | — | — | — | — | — | — | — | 4,394 | — | — | — | — | ||
36 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
a | b | c | d | e | f | g | h | i | j | ab | ac | ad | ae | af | ||
Disclosure reference date T | ||||||||||||||||
Total [gross] carrying amount | Climate Change Mitigation (CCM) | Climate Change Adaptation (CCA) | TOTAL (CCM + CCA) | |||||||||||||
of which: towards taxonomy relevant sectors (Taxonomy-eligible) | of which: towards taxonomy relevant sectors (Taxonomy- eligible) | |||||||||||||||
of which: environmentally sustainable (Taxonomy-aligned) | of which: environmentally sustainable (Taxonomy-aligned) | of which: environmentally sustainable (Taxonomy-aligned) | ||||||||||||||
of which: Use of Proc- eeds | of which: trans- itional | of which: enab- ling | of which: Use of Proc- eeds | of which: enab- ling | of which: Use of Proc- eeds | of which: trans- itional | of which: enab- ling | |||||||||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | ||
21 | Loans and advances | 33,928 | — | — | — | — | — | — | — | 4,394 | — | — | — | — | ||
22 | Debt securities, including UoP | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
23 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
24 | Households | 2,160,409 | — | — | — | — | — | — | — | 2,150,436 | — | — | — | — | ||
25 | – of which: loans collateralised by residential immovable property | 2,137,020 | — | — | — | — | — | — | — | 2,137,020 | — | — | — | — | ||
26 | – of which: building renovation loans | 2,291 | — | — | — | — | — | — | — | 2,291 | — | — | — | — | ||
27 | – of which: motor vehicle loans | 21,098 | — | — | — | — | 11,125 | — | — | — | — | |||||
28 | Local governments financing | 117,717 | — | — | — | — | — | — | — | 117,717 | — | — | — | — | ||
29 | Housing financing | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
30 | Other local government financing | 117,717 | — | — | — | — | — | — | — | 117,717 | — | — | — | — | ||
31 | Collateral obtained by taking possession: residential and commercial immovable properties | 3,221 | — | — | — | — | — | — | — | 2,822 | — | — | — | — | ||
32 | Assets excluded from the numerator for GAR calculation (covered in the denominator) | 1,786,860 | — | — | — | — | — | — | — | — | — | — | — | — | ||
33 | Financial and Non-financial undertakings | 1,018,640 | ||||||||||||||
34 | SMEs and NFCs (other than SMEs) not subject to NFRD disclosure obligations | 1,017,091 | ||||||||||||||
35 | Loans and advances | 726,008 | ||||||||||||||
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 37 |
a | b | c | d | e | f | g | h | i | j | ab | ac | ad | ae | af | ||
Disclosure reference date T | ||||||||||||||||
Total [gross] carrying amount | Climate Change Mitigation (CCM) | Climate Change Adaptation (CCA) | TOTAL (CCM + CCA) | |||||||||||||
of which: towards taxonomy relevant sectors (Taxonomy-eligible) | of which: towards taxonomy relevant sectors (Taxonomy- eligible) | |||||||||||||||
of which: environmentally sustainable (Taxonomy-aligned) | of which: environmentally sustainable (Taxonomy-aligned) | of which: environmentally sustainable (Taxonomy-aligned) | ||||||||||||||
of which: Use of Proc- eeds | of which: trans- itional | of which: enab- ling | of which: Use of Proc- eeds | of which: enab- ling | of which: Use of Proc- eeds | of which: trans- itional | of which: enab- ling | |||||||||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | ||
36 | – of which: loans collateralised by commercial immovable property | 293,476 | ||||||||||||||
37 | – of which: building renovation loans | 4,679 | ||||||||||||||
38 | Debt securities | 291,040 | ||||||||||||||
39 | Equity instruments | 43 | ||||||||||||||
40 | Non-EU country counterparties not subject to NFRD disclosure obligations | 1,549 | ||||||||||||||
41 | Loans and advances | 629 | ||||||||||||||
42 | Debt securities | 920 | ||||||||||||||
43 | Equity instruments | — | ||||||||||||||
44 | Derivatives | 7,483 | ||||||||||||||
45 | On demand interbank loans | 518,531 | ||||||||||||||
46 | Cash and cash-related assets | 33,582 | ||||||||||||||
47 | Other categories of assets (e.g. Goodwill, commodities etc.) | 208,624 | ||||||||||||||
48 | Total GAR assets | 4,331,435 | — | — | — | — | — | — | — | 2,297,626 | — | — | — | — | ||
49 | Assets not covered for GAR calculation | 2,703,804 | ||||||||||||||
50 | Central governments and Supranational issuers | 1,439,811 | ||||||||||||||
51 | Central banks exposure | 1,257,899 | ||||||||||||||
52 | Trading book | 6,094 | ||||||||||||||
53 | Total assets | 7,035,239 | — | — | — | — | — | — | — | 2,297,626 | — | — | — | — | ||
38 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
a | b | c | d | e | f | g | h | i | j | ab | ac | ad | ae | af | ||
Disclosure reference date T | ||||||||||||||||
Total [gross] carrying amount | Climate Change Mitigation (CCM) | Climate Change Adaptation (CCA) | TOTAL (CCM + CCA) | |||||||||||||
of which: towards taxonomy relevant sectors (Taxonomy-eligible) | of which: towards taxonomy relevant sectors (Taxonomy- eligible) | |||||||||||||||
of which: environmentally sustainable (Taxonomy-aligned) | of which: environmentally sustainable (Taxonomy-aligned) | of which: environmentally sustainable (Taxonomy-aligned) | ||||||||||||||
of which: Use of Proc- eeds | of which: trans- itional | of which: enab- ling | of which: Use of Proc- eeds | of which: enab- ling | of which: Use of Proc- eeds | of which: trans- itional | of which: enab- ling | |||||||||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | ||
Off-balance sheet exposures - Undertakings subject to NFRD disclosure obligations | ||||||||||||||||
54 | Financial guarantees | 10,279 | — | — | — | — | — | — | — | 3 | — | — | — | — | ||
55 | Assets under management | 395,000 | 4,558 | — | 2,356 | — | — | — | — | 21,213 | 4,558 | — | 2,356 | — | ||
56 | – of which: debt securities | 254,057 | 4,558 | — | 2,356 | — | — | — | — | 17,525 | 4,558 | — | 2,356 | — | ||
57 | – of which: equity instruments | 87,225 | — | — | — | — | — | — | — | 3,688 | — | — | — | — | ||
a | b | c | d | e | f | g | h | y | z | aa | ab | ||
Breakdown by sector - NACE 4 digits level (code and label) | Climate Change Mitigation (CCM) | Climate Change Adaptation (CCA) | TOTAL (CCM + CCA) | ||||||||||
Non-Financial corporates (Subject to NFRD) | SMEs and other NFC not subject to NFRD | Non-Financial corporates (Subject to NFRD) | SMEs and other NFC not subject to NFRD | Non-Financial corporates (Subject to NFRD) | SMEs and other NFC not subject to NFRD | ||||||||
[Gross] carrying amount | [Gross] carrying amount | [Gross] carrying amount | [Gross] carrying amount | [Gross] carrying amount | [Gross] carrying amount | ||||||||
€000 | of which: environ- mentally sustain- able (CCM) | €000 | of which: environ- mentally sustain- able (CCM) | €000 | of which: environ- mentally sustain- able (CCA) | €000 | of which: environ- mentally sustain- able (CCA) | €000 | of which: environ- mentally sustain- able (CCM + CCA) | €000 | of which: environ- mentally sustain- able (CCM + CCA ) | ||
1 | C11.05 - Manufacture of beer | — | — | — | — | 6 | — | ||||||
2 | J61.10 - Wired telecommunications activities | — | — | — | — | 1,302 | — | ||||||
3 | M70.10 - Activities of head offices | — | — | — | — | 136 | — | ||||||
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 39 |
Breakdown by sector - NACE 4 digits level (code and label) | Climate Change Mitigation (CCM) | Climate Change Adaptation (CCA) | TOTAL (CCM + CCA) | ||||||||||
Non-Financial corporates (Subject to NFRD) | SMEs and other NFC not subject to NFRD | Non-Financial corporates (Subject to NFRD) | SMEs and other NFC not subject to NFRD | Non-Financial corporates (Subject to NFRD) | SMEs and other NFC not subject to NFRD | ||||||||
[Gross] carrying amount | [Gross] carrying amount | [Gross] carrying amount | [Gross] carrying amount | [Gross] carrying amount | [Gross] carrying amount | ||||||||
€000 | of which: environ- mentally sustain- able (CCM) | €000 | of which: environ- mentally sustain- able (CCM) | €000 | of which: environ- mentally sustain- able (CCA) | €000 | of which: environ- mentally sustain- able (CCA) | €000 | of which; environ- mentally sustain- able (CCM + CCA) | €000 | of which: environ- mentally sustain- able (CCM + CCA) | ||
1 | C11.05 - Manufacture of beer | — | — | — | — | 1,466 | — | ||||||
2 | J61.10 - Wired telecommunications activities | — | — | — | — | 1,610 | — | ||||||
3 | M70.10 - Activities of head offices | — | — | — | — | 1,318 | — | ||||||
a | b | c | d | e | f | g | h | i | aa | ab | ac | ad | ae | af | ||
% (compared to total covered assets in the denominator) | Disclosure reference date T | |||||||||||||||
Climate Change Mitigation (CCM) | Climate Change Adaptation (CCA) | TOTAL (CCM + CCA) | ||||||||||||||
Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- eligible) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) | Propor- tion of total assets cove- red | |||||||||||||
Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) | ||||||||||||||
of which: Use of Proc- eeds | of which: transi- tional | of which: enabl- ing | of which: Use of Proc- eeds | of which: enabl- ing | of which: Use of Proc- eeds | of which: transi- tional | of which: enabl- ing | |||||||||
% | % | % | % | % | % | % | % | % | % | % | % | % | % | % | ||
GAR - Covered assets in both numerator and denominator | ||||||||||||||||
1 | Loans and advances, debt securities and equity instruments not HfT eligible for GAR calculation | — | — | — | — | — | — | — | 52.98 | — | — | — | — | 36.17 | ||
2 | Financial undertakings | — | — | — | — | — | — | — | 0.51 | — | — | — | — | 3.26 | ||
3 | Credit institutions | — | — | — | — | — | — | — | 0.51 | — | — | — | — | 3.26 | ||
4 | Loans and advances | — | — | — | — | — | — | — | — | — | — | — | — | 2.94 | ||
5 | Debt securities, including UoP | — | — | — | — | — | — | — | 0.51 | — | — | — | — | 0.32 | ||
6 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
7 | Other financial corporations | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
8 | – of which: investment firms | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
40 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
a | b | c | d | e | f | g | h | i | aa | ab | ac | ad | ae | af | ||
% (compared to total covered assets in the denominator) | Disclosure reference date T | |||||||||||||||
Climate Change Mitigation (CCM) | Climate Change Adaptation (CCA) | TOTAL (CCM + CCA) | ||||||||||||||
Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- eligible) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) | Propor- tion of total assets cove- red | |||||||||||||
Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) | ||||||||||||||
of which: Use of Proc- eeds | of which: transi- tional | of which: enabl- ing | of which: Use of Proc- eeds | of which: enabl- ing | of which: Use of Proc- eeds | of which: transi- tional | of which: enabl- ing | |||||||||
% | % | % | % | % | % | % | % | % | % | % | % | % | % | % | ||
9 | Loans and advances | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
10 | Debt securities, including UoP | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
11 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
12 | – of which: management companies | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
13 | Debt securities, including UoP | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
15 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
16 | – of which: insurance undertakings | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
17 | Loans and advances | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
18 | Debt securities, including UoP | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
19 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
20 | Non-financial undertakings | — | — | — | — | — | — | — | 0.03 | — | — | — | — | 0.48 | ||
21 | Loans and advances | — | — | — | — | — | — | — | 0.03 | — | — | — | — | 0.48 | ||
22 | Debt securities, including UoP | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
23 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
24 | Households | — | — | — | — | — | — | — | 49.65 | — | — | — | — | 30.71 | ||
25 | – of which: loans collateralised by residential immovable property | — | — | — | — | — | — | — | 49.34 | — | — | — | — | 30.38 | ||
26 | – of which: building renovation loans | — | — | — | — | — | — | — | 0.05 | — | — | — | — | 0.03 | ||
27 | – of which: motor vehicle loans | — | — | — | — | |||||||||||
28 | Local governments financing | — | — | — | — | — | — | — | 2.72 | — | — | — | — | 1.67 | ||
29 | Housing financing | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
30 | Other local government financing | — | — | — | — | — | — | — | 2.72 | — | — | — | — | 1.67 | ||
31 | Collateral obtained by taking possession: residential and commercial immovable properties | — | — | — | — | — | — | — | 0.07 | — | — | — | — | 0.05 | ||
32 | Total GAR assets (in the numerator) | — | — | — | — | — | — | — | 52.98 | — | — | — | — | 61.57 | ||
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 41 |
% (compared to total covered assets in the denominator) | Disclosure reference date T | |||||||||||||||
Climate Change Mitigation (CCM) | Climate Change Adaptation (CCA) | TOTAL (CCM + CCA) | ||||||||||||||
Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- eligible) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) | Propor- tion of total assets cove- red | |||||||||||||
Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) | ||||||||||||||
of which: Use of Proc- eeds | of which: transi- tional | of which: enabl- ing | of which: Use of Proc- eeds | of which: enabl- ing | of which; Use of Proc- eeds | of which: transi- tional | of which: enabl- ing | |||||||||
% | % | % | % | % | % | % | % | % | % | % | % | % | % | % | ||
GAR - Covered assets in both numerator and denominator | ||||||||||||||||
1 | Loans and advances, debt securities and equity instruments not HfT eligible for GAR calculation | — | — | — | — | — | — | — | 53.05 | — | — | — | — | 36.17 | ||
2 | Financial undertakings | — | — | — | — | — | — | — | 0.51 | — | — | — | — | 3.26 | ||
3 | Credit institutions | — | — | — | — | — | — | — | 0.51 | — | — | — | — | 3.26 | ||
4 | Loans and advances | — | — | — | — | — | — | — | — | — | — | — | — | 2.94 | ||
5 | Debt securities, including UoP | — | — | — | — | — | — | — | 0.51 | — | — | — | — | 0.32 | ||
6 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
7 | Other financial corporations | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
8 | – of which: investment firms | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
9 | Loans and advances | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
10 | Debt securities, including UoP | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
11 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
12 | – of which: management companies | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
13 | Loans and advances | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
14 | Debt securities, including UoP | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
15 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
16 | – of which: insurance undertakings | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
17 | Loans and advances | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
18 | Debt securities, including UoP | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
19 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
20 | Non-financial undertakings | — | — | — | — | — | — | — | 0.10 | — | — | — | — | 0.48 | ||
21 | Loans and advances | — | — | — | — | — | — | — | 0.10 | — | — | — | — | 0.48 | ||
22 | Debt securities, including UoP | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
23 | Equity instruments | — | — | — | — | — | — | — | — | — | — | |||||
24 | Households | — | — | — | — | — | — | — | 49.65 | — | — | — | — | 30.71 | ||
25 | – of which: loans collateralised by residential immovable property | — | — | — | — | — | — | — | 49.34 | — | — | — | — | 30.38 | ||
26 | – of which: building renovation loans | — | — | — | — | — | — | — | 0.05 | — | — | — | — | 0.03 | ||
27 | – of which: motor vehicle loans | — | — | — | — | |||||||||||
42 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
% (compared to total covered assets in the denominator) | Disclosure reference date T | |||||||||||||||
Climate Change Mitigation (CCM) | Climate Change Adaptation (CCA) | TOTAL (CCM + CCA) | ||||||||||||||
Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- eligible) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) | Propor- tion of total assets cove- red | |||||||||||||
Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- aligned) | ||||||||||||||
of which: Use of Proc- eeds | of which: transi- tional | of which: enabl- ing | of which: Use of Proc- eeds | of which: enabl- ing | of which; Use of Proc- eeds | of which: transi- tional | of which: enabl- ing | |||||||||
% | % | % | % | % | % | % | % | % | % | % | % | % | % | % | ||
28 | Local governments financing | — | — | — | — | — | — | — | 2.72 | — | — | — | — | 1.67 | ||
29 | Housing financing | — | — | — | — | — | — | — | — | — | — | — | — | — | ||
30 | Other local government financing | — | — | — | — | — | — | — | 2.72 | — | — | — | — | 1.67 | ||
31 | Collateral obtained by taking possession: residential and commercial immovable properties | — | — | — | — | — | — | — | 0.07 | — | — | — | — | 0.05 | ||
32 | Total GAR assets (in the numerator) | — | — | — | — | — | — | — | 53.05 | — | — | — | — | 61.57 | ||
% (compared to total eligible off- balance sheet assets) | Disclosure reference date T | ||||||||||||||
Climate Change Mitigation (CCM) | Climate Change Adaptation (CCA) | TOTAL (CCM + CCA) | |||||||||||||
Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- eligible) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- eligible) | |||||||||||||
Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) | |||||||||||||
of which: Use of Proceeds | of which: transit- ional | of which: enabling | of which: Use of Proceeds | of which: enabling | of which: Use of Proceeds | of which: transit- ional | of which: enabling | ||||||||
% | % | % | % | % | % | % | % | % | % | % | % | % | % | ||
1 | Financial guarantees (FinGuar KPI) | — | — | — | — | — | — | — | 0.03 | — | — | — | — | ||
2 | Assets under management (AuM KPI) | 0.58 | — | — | — | — | — | — | 2.18 | 0.58 | — | — | — | ||
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 43 |
% (compared to total eligible off- balance sheet assets) | Disclosure reference date T | ||||||||||||||
Climate Change Mitigation (CCM) | Climate Change Adaptation (CCA) | TOTAL (CCM + CCA) | |||||||||||||
Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- eligible) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-eligible) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy- eligible) | |||||||||||||
Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) | Proportion of total covered assets funding taxonomy relevant sectors (Taxonomy-aligned) | |||||||||||||
of which: Use of Proceeds | of which: transit- ional | of which: enabling | of which: Use of Proceeds | of which: enabling | of which: Use of Proceeds | of which: transit- ional | of which: enabling | ||||||||
% | % | % | % | % | % | % | % | % | % | % | % | % | % | ||
1 | Financial guarantees (FinGuar KPI) | — | — | — | — | — | — | — | 0.03 | — | — | — | — | ||
2 | Assets under management (AuM KPI) | 1.15 | — | 0.60 | — | — | — | — | 5.37 | 1.15 | — | 0.60 | — | ||
Row | Nuclear energy related activities | |||||||
1 | The undertaking carries out, funds or has exposures to research, development, demonstration and deployment of innovative electricity generation facilities that produce energy from nuclear processes with minimal waste from the fuel cycle. | NO | ||||||
2 | The undertaking carries out, funds or has exposures to construction and safe operation of new nuclear installations to produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production, as well as their safety upgrades, using best available technologies. | NO | ||||||
3 | The undertaking carries out, funds or has exposures to safe operation of existing nuclear installations that produce electricity or process heat, including for the purposes of district heating or industrial processes such as hydrogen production from nuclear energy, as well as their safety upgrades. | NO | ||||||
Fossil gas related activities | ||||||||
4 | The undertaking carries out, funds or has exposures to construction or operation of electricity generation facilities that produce electricity using fossil gaseous fuels. | NO | ||||||
5 | The undertaking carries out, funds or has exposures to construction, refurbishment, and operation of combined heat/cool and power generation facilities using fossil gaseous fuels | NO | ||||||
6 | The undertaking carries out, funds or has exposures to construction, refurbishment and operation of heat generation facilities that produce heat/cool using fossil gaseous fuels. | NO | ||||||
44 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 45 |
HSBC Values and risk culture | ||||||||||
Risk governance | Non-executive risk governance | The Board approves the bank’s risk appetite, plans and performance targets. It sets the ‘tone from the top’ and is advised by the Risk Committee. | ||||||||
Executive risk governance | Our executive risk governance structure is responsible for the enterprise-wide management of all risks, including key policies and frameworks for the management of risk within the bank. | |||||||||
Roles and responsibilities | Three lines of defence model | Our ‘three lines of defence’ model defines roles and responsibilities for risk management. An independent Risk function helps ensure the necessary balance in risk/return decisions. | ||||||||
Processes and tools | Risk appetite | The local group has processes in place to identify/assess, monitor, manage and report risks to help ensure we remain within our risk appetite. | ||||||||
Enterprise-wide risk management tools | ||||||||||
Active risk management: identification/assessment, monitoring, management and reporting | ||||||||||
Internal controls | Policies and procedures | Policies and procedures define the minimum requirements for the controls required to manage our risks. | ||||||||
Control activities | ||||||||||
Systems and infrastructure | HSBC has systems and/or processes that support the identification, capture and exchange of information to support risk management activities. | |||||||||
46 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 47 |
48 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 49 |
At 31 Dec 2023 | |
No. of shares | |
John Bonello | 40,742 |
Michel Cordina | 4,198 |
50 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
At 31 Jan 2024 | ||
Total shareholders | Shares | |
Range of shareholding | ||
1 – 500 | 1,503 | 445,072 |
501 – 1,000 | 1,125 | 846,151 |
1,001 – 5,000 | 3,755 | 9,570,372 |
5,001 and over | 2,585 | 349,444,504 |
Total shareholding | 8,968 | 360,306,099 |
John Bonello |
Simon Vaughan Johnson (resigned 30 April 2023) |
Geoffrey Fichte (appointed 1 May 2023) |
Henri Mizzi (resigned on 31 October 2023) |
Maria Micallef |
Yiannos Michaelides |
Michel Cordina |
Ingrid Azzopardi |
Manfred Galdes |
Terecina Kwong |
Alexiei Dingli (appointed 24 January 2024) |
John Bonello | 1 Non-Executive chairmanship |
Geoffrey Fichte | 1 Executive Directorship and 2 Non-Executive directorships all within the same Group |
Michel Cordina | 1 Executive Directorship |
Terecina Kwong | 1 Executive Directorship and 1 Non-Executive Directorship |
Ingrid Azzopardi | 1 Non-Executive Directorship |
Maria Micallef | 1 Executive Directorship and 2 Non-Executive Directorships |
Yiannos Michaelides | 1 Non-Executive Directorship |
Manfred Galdes | 2 Executive Directorships within the same Group and 2 Non-Executive Directorships. |
Alexiei Dingli | 1 Executive Directorship and 2 Non-Executive Directorships. |
Manfred Galdes | Financial and Anti-Money Laundering Legislation |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 51 |
Geoffrey Fichte | Chief Executive Officer |
Svetlana Maslova | Chief Operating Officer |
Charlotte Cilia | Chief Financial Officer |
Muriel Rutland | Designate Head of Wealth and Personal Banking |
Michel Cordina | Head of Business Development |
Jesmond Apap | Head of Global Markets |
David Perotti | Head of Human Resources |
Joyce Grech | Head of Commercial Banking |
Joseph Sammut | General Counsel |
Steven Beddow | Chief Risk Officer |
Mandy Falzon | Chief Compliance Officer |
Carine Arpa | Head of Communications |
Paula Mamo | Company Secretary |
Morgan Carabott | Head of Internal Audit |
52 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 53 |
54 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 55 |
Attended | |
Ingrid Azzopardi | 6 out of 6 |
Maria Micallef | 6 out of 6 |
Henri Mizzi (resigned 31 October 2023) | 5 out of 5 |
John Bonello (as interim member) | 1 out of 1 |
56 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Attended | |
Manfred Galdes | 6 out of 6 |
Ingrid Azzopardi | 6 out of 6 |
Yiannos Michaelides | 6 out of 6 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 57 |
Attended | |
John Bonello | 9 out of 9 |
Simon Vaughan Johnson | 5 out of 5 |
Geoffrey Fichte | 4 out of 4 |
Michel Cordina | 9 out of 9 |
Yiannos Michaelides | 7 out of 9 |
Manfred Galdes | 9 out of 9 |
Ingrid Azzopardi | 9 out of 9 |
Henri Mizzi | 9 out of 9 |
Maria Micallef | 9 out of 9 |
Terecina Kwong | 6 out of 9 |
58 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 59 |
60 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 61 |
Attended | |
Maria Micallef | 7 out of 7 |
John Bonello | 7 out of 7 |
Henri Mizzi | 6 out of 6 |
Manfred Galdes (as interim member) | 1 out of 1 |
62 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Description | Purpose, relevant features and link to strategy |
Fixed Pay | Fixed pay reflects the individual’s role, experience and responsibility. It comprises the base salary and in some cases a fixed pay allowance and/or a pension. |
These consist of cash allowances in lieu of personal/occupational pension arrangements of international assignees appointed to Executive Director or Senior Management positions. An employee pension plan scheme is offered to all local employees subject to the terms and conditions of the scheme. | |
Benefits | Benefits take account of local market practices and include the provision of medical insurance, health assessment, life assurance, and tax assistance where appropriate. |
Variable Pay – annual incentive | Variable pay award is discretionary, and is determined and paid in line with internal bank policies and procedures. Variable pay awards are made to drive and reward performance against annual financial and non-financial measures and adherence to HSBC values which are consistent with the medium to long-term strategy and aligns to shareholder interests. |
Performance targets are set taking into account the economic environment, strategic priorities and risk appetite. The bank has two rating scales to measure performance of employees: a four rating scale measuring performance targets achieved and another four rating scale measuring and assessing the behaviour of employees in line with the HSBC values. All employees receive a behaviour rating as well as a performance rating, which ensures performance is assessed not only on what is achieved but also how it is achieved. Each department comes together every year to calibrate the ratings given to employees to ensure a fair, consistent and bias free assessment. This exercise ensures that the process is transparent and fair across the bank. Performance reporting tools are available to all line managers for the purpose of undertaking an analytical review of the variable pay decisions for them. Variable pay is delivered in the form of cash and shares in HSBC Bank Holdings plc. | |
Individuals in control functions are assessed according to the objectives specific to the functional role they undertake, to ensure their remuneration is determined independent of the performance of the business areas they control. | |
Where variable pay for Identified Staff is more than €50,000 or where variable pay is greater than 33% of Total Compensation, a minimum of 50% of awards are made in shares. Variable pay is restricted to a maximum of 100% of fixed pay. | |
A substantial portion, and in any event at least 40 %, of the variable remuneration component, is subject to deferral and vested over a period which is not less than four years for Non Senior Management and not less than five years for Senior Management. This portion is correctly aligned with the nature of the business, its risks and the activities of the staff members concerned. | |
The award is non-pensionable. |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 63 |
Type of action | Type of variable pay award affected | Circumstances where action may apply (including, but not limited to): |
– Involvement in Group-wide events resulting in significant operational losses, including events which have caused or have the potential to cause significant harm to HSBC. | ||
– For specified individuals, insufficient yearly progress in developing an effective Anti-Money Laundering (‘AML’) and sanctions compliance programme. | ||
– Failure to complete mandatory learning. | ||
Malus | ||
– Improper or inadequate risk management. | ||
Vested or paid awards | ||
– Reasonable evidence of misconduct or material error that would justify, or would have justified, summary termination of a contract of employment. | ||
– HSBC or a business unit suffers a material failure of risk management within the context of Group risk management standards, policies and procedures. |
280,826,046 votes (99.82%) | |
255,305 votes (0.09%) | |
257,296 votes (0.09%) |
64 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Geoffrey Fichte* | Simon Vaughan Johnson** | Michel Cordina | |||
2023 | 2023 | 2022 | 2023 | 2022 | |
€ | € | € | € | € | |
Fixed pay | 310,163 | 127,135 | 452,998 | 150,804 | 147,467 |
Variable pay: | |||||
– Immediate Cash | 74,986 | — | 66,932 | 50,000 | 43,000 |
– Immediate Shares* | 74,986 | — | 66,932 | — | — |
– Deferred Cash | 49,991 | — | 44,621 | — | — |
– Deferred Shares* | 49,991 | — | 44,621 | — | — |
Benefits | 20,966 | 74,263 | 124,542 | 13,158 | 12,253 |
Aggregate | 581,083 | 201,398 | 800,646 | 213,962 | 202,720 |
Effective period | 01/05/23 - 31/12/23 | 01/01/23- 30/04/23 | 01/01/22- 31/12/22 | 01/01/23- 31/12/23 | 01/01/22- 31/12/22 |
2022/ 2023 | 2021/ 2022 | 2020/ 2021 | |
Percentage annual change in remuneration1 | |||
Simon Vaughan Johnson2 | (1)% | 9% | |
Michel Cordina3 | 6% | 4% | 10% |
Percentage annual change of the bank’s performance4 | 144% | 76% | 47% |
Percentage annual change of the average remuneration of the bank’s employees, on a full-time equivalent basis5 | 8% | 6% | 5% |
Grant Date | Share Value € | Number of Shares | Performance Period | |
Immediate Shares | 01/03/2023 | 66,932 | 8,948 | 2022 |
Deferred Shares* | 01/03/2023 | 44,621 | 6,913 | 2022 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 65 |
Value of Total Variable Pay | Deferral % of variable pay is subject to variance and is split between cash and shares |
Up to €50,000, provided that total variable pay does not exceed 33% of the Total Compensation. | 0% |
Above €50,000 up to €500,000 or amounts below €50,000 where variable pay is greater than 33% of Total Compensation. | 40% |
Above €500,000 | 60% |
2023 Fees | 2022 Fees | |
€ | € | |
John Bonello | 75,761 | 74,400 |
Andrew Muscat | N/A | 13,024 |
Sue Vella | N/A | 42,900 |
Yiannos Michaelides | 39,600 | 39,600 |
Ingrid Azzopardi | 59,700 | 59,700 |
Manfred Galdes | 50,916 | 50,400 |
Henri Mizzi | 38,000 | 8,527 |
Maria Micallef | 46,800 | 3,900 |
Total | 310,777 | 292,451 |
66 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
MB Supervisory function | MB Management function | Other senior management | Other Identified Staff | |||
1 | Fixed remuneration | Number of Identified Staff | 6 | 2 | 12 | 38 |
2 | Total fixed remuneration (€000) | 316 | 696 | 1,790 | 2,746 | |
3 | – of which: cash-based (€000) | 316 | 568 | 1,627 | 2,454 | |
EU-5x | – of which: other instruments (€000) | — | 20 | 14 | 38 | |
7 | – of which: other forms (€000) | — | 108 | 149 | 254 | |
9 | Variable remuneration | Number of Identified Staff | 6 | 2 | 12 | 38 |
10 | Total variable remuneration (€000) | — | 300 | 602 | 405 | |
11 | – of which: cash-based (€000) | — | 125 | 395 | 405 | |
12 | – of which: deferred (€000) | — | 50 | 59 | — | |
EU-13a | – of which: shares or equivalent ownership interests (€000) | — | 75 | 89 | — | |
EU-14a | – of which: deferred (€000) | — | 50 | 59 | — | |
17 | Total remuneration for the year ended 31 December 2023 (€000) | 316 | 996 | 2,392 | 3,151 | |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 67 |
Deferred and retained remuneration | Total amount of deferred remuneration awarded for previous performance periods | of which: due to vest in the financial year | of which: vesting in subsequent financial years | Amount of performance adjustment made in the financial year to deferred remuneration that was due to vest in future performance years | Total amount of adjustment during the financial year due to ex post implicit adjustments (i.e. changes of value of deferred remuneration due to the changes of prices of instruments) | Total amount of deferred remuneration awarded before the financial year actually paid out in the financial year | Total of amount of deferred remuneration awarded for previous performance period that has vested but is subject to retention periods | ||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | ||
7 | MB Management function | 555 | 165 | 391 | — | — | 31 | 161 | 40 |
8 | Cash-based | 219 | 55 | 165 | — | — | — | 54 | — |
9 | Shares or equivalent ownership interests | 336 | 110 | 226 | — | — | 31 | 107 | 40 |
13 | Other senior management | 151 | 23 | 128 | — | — | 5 | 22 | — |
14 | Cash-based | 47 | — | 47 | — | — | — | — | — |
15 | Shares or equivalent ownership interests | 104 | 23 | 81 | — | — | 5 | 22 | — |
18 | Other forms | ||||||||
25 | Total amount as at 31 Dec 2023 | 706 | 188 | 519 | — | — | 36 | 183 | 40 |
Management body remuneration | Business areas | All other | Total as at 31 Dec 2023 | ||||||||
MB Super- visory function | MB Manage- ment function | Total MB | Invest- ment banking | Retail banking | Asset manage- ment | Corpo- rate functions | Independent internal control functions | ||||
1 | Total number of Identified Staff | 6 | 2 | 8 | 3 | 4 | 12 | 13 | 14 | 4 | 58 |
2 | – of which: members of the MB (€000) | 6 | 2 | 8 | 8 | ||||||
3 | – of which: other senior management (€000) | 1 | 2 | — | 6 | 2 | 1 | 12 | |||
4 | – of which: other Identified Staff (€000) | 2 | 2 | 12 | 7 | 12 | 3 | 38 | |||
5 | Total remuneration of Identified Staff (€000) | 316 | 996 | 1,312 | 295 | 1,123 | 767 | 1,570 | 1,140 | 648 | 6,855 |
6 | – of which: variable remuneration (€000) | — | 300 | 300 | 59 | 388 | 82 | 235 | 161 | 82 | 1,307 |
7 | – of which: fixed remuneration (€000) | 316 | 696 | 1,012 | 235 | 735 | 685 | 1,335 | 979 | 566 | 5,548 |
68 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Group | Bank | ||||
2023 | 2022 | 2023 | 2022 | ||
Notes | €000 | €000 | €000 | €000 | |
Interest and similar income | |||||
– on loans and advances to banks and customers and other financial assets | 7 | 195,855 | 113,947 | ||
– on debt and other fixed income instruments | 7 | 18,021 | 2,692 | ||
Interest expense | 8 | ( | ( | (18,064) | (8,397) |
Net interest income | 195,812 | 108,242 | |||
Fee income | 19,520 | 22,390 | |||
Fee expense | ( | ( | (2,399) | (3,213) | |
Net fee income | 9 | 17,121 | 19,177 | ||
Insurance revenue | — | — | |||
Insurance service expense | ( | ( | — | — | |
Net expenses from reinsurance contracts | ( | ( | — | — | |
Insurance service result | 10 | — | — | ||
Net income/(expense) from assets and liabilities of insurance businesses, measured at fair value through profit or loss | 11 | ( | — | — | |
Insurance finance (expense)/income | 10 | ( | — | — | |
Net trading income | 12 | 7,623 | 7,689 | ||
Dividend income from subsidiaries | 13 | 769 | 1,308 | ||
Other operating (expense)/income | 14 | ( | (36) | 1,514 | |
Net operating income before change in expected credit losses and other credit impairment charges | 221,289 | 137,930 | |||
Change in expected credit losses and other credit impairment charges | 15 | 4,580 | 9,561 | ||
Net operating income | 225,869 | 147,491 | |||
Employee compensation and benefits | 16 | ( | ( | (41,403) | (37,784) |
General and administrative expenses | 17 | ( | ( | (48,138) | (49,090) |
Depreciation and impairment of property, plant and equipment and right-of-use assets | 32,31 | ( | ( | (3,167) | (3,300) |
Amortisation and impairment of intangible assets | 33 | ( | ( | (5,027) | (4,757) |
Total operating expenses | ( | ( | (97,735) | (94,931) | |
Profit before tax | 17 | 128,134 | 52,560 | ||
Tax expense | 18 | ( | ( | (44,835) | (18,053) |
Profit for the year | 83,299 | 34,507 | |||
Earnings per share | 20 | € | € | ||
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 69 |
Group | Bank | ||||
2023 | 2022 | 2023 | 2022 | ||
Notes | €000 | €000 | €000 | €000 | |
Profit for the year | 83,299 | 34,507 | |||
Other comprehensive income | |||||
Items that will be reclassified subsequently to profit or loss when specific conditions are met: | |||||
Debt instruments measured at fair value through other comprehensive income: | ( | 8,697 | (23,177) | ||
– fair value gains/(losses) | 43 | ( | 13,380 | (35,657) | |
– income taxes | 43 | ( | (4,683) | 12,480 | |
Items that will not be reclassified subsequently to profit or loss: | |||||
Properties: | 1,643 | 166 | |||
– surplus arising on revaluation | 43 | 1,826 | 185 | ||
– income taxes | 43 | ( | ( | (183) | (19) |
Post employment benefit obligations: | ( | (14) | 893 | ||
– remeasurement of post employment benefit obligations | 39 | ( | (22) | 1,374 | |
– income taxes | ( | 8 | (481) | ||
Equity instruments designated at fair value through other comprehensive income: | 4 | 1 | |||
– fair value gains | 43 | 6 | 2 | ||
– income taxes | 43 | ( | ( | (2) | (1) |
Other comprehensive income for the year, net of tax | ( | 10,330 | (22,117) | ||
Total comprehensive income for the year | 93,629 | 12,390 | |||
70 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Group | Bank | |||||
At 31 Dec | At 31 Dec | At 1 Jan | At 31 Dec | At 31 Dec | ||
2023 | 2022 | 2022 | 2023 | 2022 | ||
Notes | €000 | €000 | €000 | €000 | €000 | |
Assets | ||||||
Balances with Central Bank of Malta, Treasury Bills and cash | 21 | 1,676,639 | 1,583,348 | |||
Items in the course of collection from other banks | 8,427 | 6,921 | ||||
Financial assets mandatorily measured at fair value through profit or loss | 22 | — | — | |||
Derivatives | 23 | 13,577 | 25,745 | |||
Loans and advances to banks | 24 | 716,140 | 726,217 | |||
Loans and advances to customers | 25 | 3,083,843 | 3,175,167 | |||
Financial investments | 26 | 1,315,857 | 1,004,768 | |||
Prepayments, accrued income and other assets | 27 | 30,086 | 29,013 | |||
Current tax assets | 152 | 1,363 | ||||
Reinsurance contract assets | 10 | — | — | |||
Non-current assets held for sale | 28 | 5,816 | 5,173 | |||
Investments in subsidiaries | 29 | 30,859 | 30,859 | |||
Investment property | 30 | — | — | |||
Right-of-use assets | 31 | 2,284 | 2,459 | |||
Property, plant and equipment | 32 | 51,691 | 44,623 | |||
Intangible assets | 33 | 20,356 | 18,604 | |||
Deferred tax assets | 34 | 30,623 | 35,620 | |||
Total assets | 6,986,350 | 6,689,880 | ||||
Liabilities | ||||||
Deposits by banks | 35 | 5,117 | 2,861 | |||
Customer accounts | 36 | 6,172,269 | 6,010,392 | |||
Items in the course of transmission to other banks | 18,359 | 27,397 | ||||
Liabilities under investment contracts | 37 | — | — | |||
Derivatives | 23 | 5,748 | 10,252 | |||
Accruals, deferred income and other liabilities | 38 | 44,761 | 33,346 | |||
Current tax liabilities | 35,190 | 2,104 | ||||
Insurance contract liabilities | 10 | — | — | |||
Provisions | 39 | 20,719 | 18,830 | |||
Deferred tax liabilities | 34 | 3,727 | 3,569 | |||
Borrowings from a group undertaking | 40 | 90,000 | 60,000 | |||
Subordinated liabilities | 41 | 65,000 | 62,000 | |||
Total liabilities | 6,460,890 | 6,230,751 | ||||
Equity | ||||||
Called up share capital | 42 | 108,092 | 108,092 | |||
Revaluation reserve | 43 | 10,408 | 64 | |||
Retained earnings | 43 | 406,960 | 350,973 | |||
Total equity | 525,460 | 459,129 | ||||
Total liabilities and equity | 6,986,350 | 6,689,880 | ||||
Memorandum items | ||||||
Guarantees and other contingent liabilities | 44 | 200,445 | 182,250 | |||
Commitments | 44 | 838,659 | 842,320 | |||
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 71 |
Group | |||||
Share capital | Revaluation reserve | Retained earnings | Total equity | ||
Notes | €000 | €000 | €000 | €000 | |
At 1 Jan 2023 | |||||
Profit for the year | — | — | |||
Other comprehensive income | |||||
Financial investments measured at fair value through other comprehensive income: | |||||
– fair value gains, net of tax | 43 | — | — | ||
Properties: | |||||
– surplus arising on revaluation, net of tax | 43 | — | — | ||
Post employment benefit obligations: | |||||
– remeasurement of post employment benefit obligations, net of tax | — | — | ( | ( | |
Total other comprehensive income | — | ( | |||
Total comprehensive income for the year | — | ||||
Transactions with owners, recognised directly in equity | |||||
Contributions by and distributions to owners: | |||||
– share-based payment arrangements, net of tax | — | — | ( | ( | |
– dividends | 19 | — | — | ( | ( |
Total contributions by and distributions to owners | — | — | ( | ( | |
At 31 Dec 2023 | |||||
At 31 Dec 2021 (IFRS 4) | |||||
Impact on transition to IFRS 17 net of tax1 | — | — | ( | ( | |
At 1 Jan 2022 (restated) | |||||
Profit for the year (restated) | — | — | |||
Other comprehensive income | |||||
Financial investments measured at fair value through other comprehensive income: | |||||
– fair value losses, net of tax | 43 | — | ( | — | ( |
Properties: | — | ||||
– surplus arising on revaluation, net of tax | 43 | — | — | ||
Post employment benefit obligations: | |||||
– remeasurement of post employment benefit obligations, net of tax | — | — | |||
Total other comprehensive income (restated) | — | ( | ( | ||
Total comprehensive income for the year (restated) | — | ( | |||
Other movements | |||||
Properties: | |||||
– transfer of revaluation surplus on disposal of property to retained earnings, net of tax | 43 | — | ( | — | |
Transactions with owners, recognised directly in equity | |||||
Contributions by and distributions to owners: | |||||
– share-based payment arrangements, net of tax | — | — | ( | ( | |
– dividends | 19 | — | — | ( | ( |
Total contributions by and distributions to owners | — | — | ( | ( | |
At 31 Dec 2022 (restated) | |||||
72 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Bank | |||||
Share capital | Revaluation reserve | Retained earnings | Total equity | ||
Notes | €000 | €000 | €000 | €000 | |
At 1 Jan 2023 | 108,092 | 64 | 350,973 | 459,129 | |
Profit for the year | — | — | 83,299 | 83,299 | |
Other comprehensive income | |||||
Financial investments measured at fair value through other comprehensive income: | |||||
– fair value gains, net of tax | 43 | — | 8,701 | — | 8,701 |
Properties: | |||||
– surplus arising on revaluation, net of tax | 43 | — | 1,643 | — | 1,643 |
Post employment benefit obligations: | |||||
– remeasurement of post employment benefit obligations, net of tax | — | — | (14) | (14) | |
Total other comprehensive income | — | 10,344 | (14) | 10,330 | |
Total comprehensive income for the year | — | 10,344 | 83,285 | 93,629 | |
Transactions with owners, recognised directly in equity | |||||
Contributions by and distributions to owners: | |||||
– share-based payment arrangements, net of tax | — | — | (108) | (108) | |
– dividends | 19 | — | — | (27,190) | (27,190) |
Total contributions by and distributions to owners | — | — | (27,298) | (27,298) | |
At 31 Dec 2023 | 108,092 | 10,408 | 406,960 | 525,460 | |
At 1 Jan 2022 | 108,092 | 24,330 | 322,437 | 454,859 | |
Profit for the year | — | — | 34,507 | 34,507 | |
Other comprehensive income | |||||
Financial investments measured at fair value through other comprehensive income: | |||||
– fair value losses, net of tax | 43 | — | (23,176) | — | (23,176) |
Properties: | — | ||||
– surplus arising on revaluation, net of tax | 43 | — | 166 | — | 166 |
Post employment benefit obligations: | |||||
– remeasurement of post employment benefit obligations, net of tax | — | — | 893 | 893 | |
Total other comprehensive income | — | (23,010) | 893 | (22,117) | |
Total comprehensive income for the year | — | (23,010) | 35,400 | 12,390 | |
Other movements | |||||
Properties: | |||||
– transfer of revaluation surplus on disposal of property to retained earnings, net of tax | 43 | — | (1,256) | 1,256 | — |
Transactions with owners, recognised directly in equity | |||||
Contributions by and distribution to owners: | |||||
– share-based payment arrangements, net of tax | — | — | (110) | (110) | |
– dividends | 19 | — | — | (8,010) | (8,010) |
Total contributions by and distributions to owners | — | — | (8,120) | (8,120) | |
At 31 Dec 2022 | 108,092 | 64 | 350,973 | 459,129 | |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 73 |
Group | Bank | ||||
2023 | 2022 | 2023 | 2022 | ||
Notes | €000 | €000 | €000 | €000 | |
Cash flows from operating activities | |||||
Interest, fees, loan recoveries and premium receipts | 218,284 | 149,702 | |||
Interest, fees and claims payments | ( | ( | (17,368) | (10,823) | |
Payments to employees and suppliers | ( | ( | (77,579) | (79,550) | |
Cash flows from operating activities before changes in operating assets and liabilities | 123,337 | 59,329 | |||
(Increase)/decrease in operating assets: | |||||
– financial assets mandatorily measured at fair value through profit or loss | — | — | |||
– reserve deposit with Central Bank of Malta | ( | 1,640 | (2,559) | ||
– loans and advances to banks and customers | 213,182 | 64,971 | |||
– Treasury Bills | ( | (325,612) | 161,352 | ||
– other assets | ( | 2,886 | (3,186) | ||
(Decrease)/increase in operating liabilities: | |||||
– deposits by banks and customer accounts | 163,278 | 350,304 | |||
– other liabilities | ( | ( | (2,268) | (2,163) | |
Net cash from operating activities before tax | 176,443 | 628,048 | |||
– tax paid | ( | ( | (9,918) | (10,116) | |
Net cash from operating activities | 166,525 | 617,932 | |||
Cash flows from investing activities | |||||
Dividends received | 500 | 850 | |||
Interest received from financial investments | 11,097 | 6,142 | |||
Purchase of financial investments | ( | ( | (568,904) | (464,793) | |
Proceeds from sale and maturity of financial investments | 283,058 | 255,296 | |||
Purchase of property, plant and equipment and intangible assets | ( | ( | (15,945) | (12,726) | |
Proceeds from sale of property, plant and equipment and intangible assets | — | — | |||
Net cash from investing activities | ( | ( | (290,194) | (215,231) | |
Cash flows from financing activities | |||||
Dividends paid | ( | ( | (27,190) | (8,010) | |
Proceeds from borrowings from a group undertaking | 30,000 | — | |||
Issue of subordinated liabilities | 65,000 | — | |||
Repayment of subordinated liabilities | ( | (62,000) | — | ||
Net cash from financing activities | ( | 5,810 | (8,010) | ||
Net increase in cash and cash equivalents | ( | (117,859) | 394,691 | ||
Cash and cash equivalents at beginning of year | 1,926,727 | 1,543,517 | |||
Effect of exchange rate changes on cash and cash equivalents | ( | 12,472 | (11,481) | ||
Cash and cash equivalents at end of year | 46 | 1,821,340 | 1,926,727 | ||
74 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
IFRS 4 | IFRS 17 | |
Balance sheet | – Insurance contract liabilities for non-linked life insurance contracts are calculated by actuarial principles. Liabilities under unit-linked life insurance contracts are at least equivalent to the surrender or transfer value, by reference to the value of the relevant underlying funds or indices. – An intangible asset for the PVIF is recognised, representing the upfront recognition of future profits associated with in force insurance contracts. | – Insurance contract liabilities are measured for groups of insurance contracts at current value, comprising the fulfilment cash flows and the CSM. – The fulfilment cash flows comprise the best estimate of the present value of the future cash flows, together with a risk adjustment for non- financial risk. – The CSM represents the unearned profit. |
Profit emergence / recognition | – The value of new business is reported as revenue on Day 1 as an increase in PVIF. – The impact of the majority of assumption changes is recognised immediately in the income statement. – Variances between actual and expected cash flows are recognised in the period they arise. | – The CSM is systematically recognised in revenue as services are provided over the expected coverage period of the group of contracts (i.e. no Day 1 profit). – Contracts are measured using the general measurement model (‘GMM’) or the variable fee approach (‘VFA’) model for insurance contracts with direct participation features upon meeting the eligibility criteria. Under the VFA model, the local group’s share of the investment experience and assumption changes are absorbed by the CSM and released over time to profit or loss. For contracts measured under GMM, the local group’s share of the investment volatility is recorded in profit or loss as it arises. – Losses from onerous contracts are recognised in the income statement immediately. |
Investment return assumptions (discount rate) | – PVIF is calculated based on long-term investment return assumptions based on assets held. It therefore includes investment margins expected to be earned in future. | – Under the market consistent approach, expected future investment spreads are not included in the investment return assumption. Instead, the discount rate includes an illiquidity premium that reflects the nature of the associated insurance contract liabilities. |
Expenses | – Total expenses to acquire and maintain the contract over its lifetime are included in the PVIF calculation. – Expenses are recognised across operating expenses and fee expense as incurred and the allowances for those costs released from the PVIF simultaneously . | – Projected lifetime expenses that are directly attributable costs are included in the insurance contract liabilities and recognised in the insurance service result. – Non-attributable costs are reported in operating expenses. |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 75 |
76 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 77 |
78 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 79 |
Origination CRR | Significance trigger – PD to increase by |
80 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Origination CRR | Additional significance criteria – number of CRR grade notches deterioration required to identify as significant credit deterioration (stage 2) (>or equal to) |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 81 |
82 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 83 |
84 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 85 |
86 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 87 |
88 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 89 |
90 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 91 |
92 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 93 |
94 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 95 |
2023 | 2022 | |
€000 | €000 | |
Balances with Central Bank of Malta and Treasury Bills | 1,643,057 | 1,553,848 |
Items in course of collection from other banks | 8,427 | 6,921 |
Loans and advances to banks | 716,140 | 726,217 |
Loans and advances to customers | 3,083,843 | 3,175,167 |
Debt instruments measured at fair value through other comprehensive income | 456,930 | 637,709 |
Debt instruments measured at amortised cost | 858,886 | 367,024 |
Accrued income and other assets | 21,910 | 18,174 |
Off-balance sheet: | ||
– financial guarantees | 10,279 | 11,787 |
– performance guarantees and similar contracts | 174,290 | 155,529 |
– loan and other credit related commitments | 838,659 | 842,320 |
At 31 Dec | 7,812,421 | 7,494,696 |
2023 | 2022 | |
€000 | €000 | |
Derivatives | 13,577 | 25,745 |
96 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
2023 | 2022 | |||
Gross carrying/ nominal amount | Allowance for ECL | Gross carrying/ nominal amount | ||
€000 | €000 | €000 | €000 | |
Loans and advances to customers at amortised cost | 3,129,321 | (45,478) | 3,222,901 | (47,734) |
– personal | 2,214,220 | (23,754) | 2,286,234 | (24,710) |
– corporate and commercial | 855,362 | (19,931) | 872,673 | (20,669) |
– non-bank financial institutions | 59,739 | (1,793) | 63,994 | (2,355) |
Loans and advances to banks at amortised cost | 716,140 | — | 726,218 | (1) |
Other financial assets measured at amortised cost | 2,151,423 | (4,723) | 1,709,271 | (5,596) |
– balances at central banks | 1,257,498 | (21) | 1,269,367 | (13) |
– items in the course of collection from other banks | 8,427 | — | 6,921 | — |
– debt instruments measured at amortised cost | 858,915 | (29) | 367,042 | (18) |
– Treasury Bills measured at amortised cost | — | — | 42,203 | (1) |
– accrued income and other assets | 26,583 | (4,673) | 23,738 | (5,564) |
Total gross carrying amount on balance sheet | 5,996,884 | (50,201) | 5,658,390 | (53,331) |
Loan and other credit-related commitments | 838,659 | (1,230) | 842,320 | (1,173) |
– personal | 293,459 | (28) | 359,233 | (26) |
– corporate and commercial (including non-bank financial institutions) | 533,594 | (1,202) | 480,711 | (1,147) |
– banks | 11,606 | — | 2,376 | — |
Financial guarantees | 10,279 | (88) | 11,787 | (149) |
– personal | 200 | — | 200 | — |
– corporate and commercial (including non-bank financial institutions) | 10,079 | (88) | 11,587 | (149) |
Total nominal amount off balance sheet | 848,938 | (1,318) | 854,107 | (1,322) |
Total at 31 Dec | 6,845,822 | (51,519) | 6,512,497 | (54,653) |
Fair value | Allowance for ECL | Fair value | ||
€000 | €000 | €000 | €000 | |
Debt instruments measured at fair value through other comprehensive income | 456,930 | (38) | 637,709 | (60) |
Treasury Bills measured at fair value through other comprehensive income | 385,580 | (11) | 242,292 | (4) |
Total at 31 Dec | 842,510 | (49) | 880,001 | (64) |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 97 |
Gross loans and advances to customers | Gross loans by business segment as a % of total gross loans | Credit impaired loans and advances to customers | Credit impaired loans by business segment as a % of sector gross loans | |
€000 | % | €000 | % | |
At 31 Dec 2023 | ||||
Personal lending | ||||
– first lien residential mortgages | 2,040,495 | 65.2 | 42,833 | 2.1 |
– other personal lending | 173,725 | 5.6 | 7,883 | 4.5 |
Wholesale lending | ||||
– commercial real estate and other property related | 54,240 | 1.7 | 6,131 | 11.3 |
– state-owned entities | 263,784 | 8.4 | — | — |
– other commercial | 597,077 | 19.1 | 43,515 | 7.3 |
Total | 3,129,321 | 100 | 100,362 | 3.2 |
At 31 Dec 2022 | ||||
Personal lending | ||||
– first lien residential mortgages | 2,100,009 | 65.2 | 53,033 | 2.5 |
– other personal lending | 186,225 | 5.8 | 10,119 | 5.4 |
Wholesale lending | ||||
– commercial real estate and other property related | 182,077 | 5.6 | 32,852 | 18.0 |
– state-owned entities | 303,387 | 9.4 | — | — |
– other commercial | 451,203 | 14.0 | 23,006 | 5.1 |
Total | 3,222,901 | 100 | 119,010 | 3.7 |
98 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Gross on- balance sheet exposure | Collateral | Net maximum exposure | ||||
Residential property | Commercial property | Securities/ cash | Other | |||
€000 | €000 | €000 | €000 | €000 | €000 | |
At 31 Dec 2023 | ||||||
Electricity, gas, water supply and waste management | 82,369 | — | 2 | 3 | 36,725 | 45,639 |
Accommodation and food service | 51,006 | 1,330 | 34,716 | — | — | 14,960 |
Construction, real estate activities | 101,552 | 7,348 | 72,792 | 6,505 | 5,079 | 9,828 |
Wholesale and retail trade and repairs | 141,491 | 7,087 | 62,392 | 3,077 | 52 | 68,883 |
Services | 431,885 | 6,725 | 87,716 | 5,640 | 219,004 | 112,800 |
Manufacturing, agriculture and fishing | 107,721 | 7,047 | 30,995 | 919 | 45 | 68,715 |
Households and individuals | 2,213,297 | 2,102,086 | 238 | 1,917 | 559 | 108,497 |
3,129,321 | 2,131,623 | 288,851 | 18,061 | 261,464 | 429,322 | |
At 31 Dec 2022 | ||||||
Electricity, gas, water supply and waste management | 111,046 | 62 | 1 | 3,325 | 53,736 | 53,922 |
Accommodation and food service | 79,168 | 784 | 44,618 | 6 | — | 33,760 |
Construction, real estate activities | 108,445 | 10,250 | 66,495 | 1,919 | 5,453 | 24,328 |
Wholesale and retail trade and repairs | 179,956 | 4,577 | 42,785 | 3,744 | 18,162 | 110,688 |
Services | 396,817 | 4,902 | 84,126 | 8,257 | 205,981 | 93,551 |
Manufacturing, agriculture and fishing | 62,196 | 2,948 | 19,574 | 317 | 779 | 38,578 |
Households and individuals | 2,285,273 | 2,153,777 | 305 | 10,106 | 4,570 | 116,515 |
3,222,901 | 2,177,300 | 257,904 | 27,674 | 288,681 | 471,342 | |
Quality classification definitions ‘Strong’ exposures demonstrate a strong capacity to meet financial commitments, with negligible or low probability of default and/or low levels of expected loss. Personal accounts operate within product parameters. ‘Good’ exposures demonstrate good capacity to meet financial commitments, with low to moderate default risk. Personal accounts typically show only short periods of delinquency. For residential mortgages, losses are expected to be minimal following the adoption of recovery processes. ‘Satisfactory’ exposures require closer monitoring and demonstrate an average to fair capacity to meet financial commitments, with moderate default risk. Personal accounts typically show only short periods of delinquency. For residential mortgages, losses are expected to be minor following the adoption of recovery processes. ‘Sub-standard’ exposures require varying degrees of special attention and default risk is of greater concern. Personal portfolio segments show longer delinquency periods of generally up to 89 days past due. ‘Credit impaired’ exposures have been assessed as impaired, where the borrower is either 90 or more days past due or is facing significant financial difficulty such that a detrimental impact on the future estimated cash flows has occurred. |
Sovereign debt securities and bills – External credit rating | Other debt securities and bills – External credit rating | Wholesale lending | Personal lending – First lien residential mortgages | Personal lending – Other | |
Quality classification | |||||
Strong | BBB and above | A- and above | CRR1 to CRR2 | Not past due with LTV lower than 50% | Not past due facilities with no delinquency in the last 12 months |
Good | BBB- to BB | BBB+ to BBB- | CRR3 | Not past due with LTV between 50% and 90% | Not past due facilities with less than 30 days delinquency in the last 12 months |
Satisfactory | BB- to B and unrated | BB+ to B and unrated | CRR4 to CRR5 | Not past due with LTV between 90% and 100% Not past due with unperfected collateral | Not past due facilities with 30 days delinquency or more in the last 12 months |
Sub-standard | B- to C | B- to C | CRR6 to CRR8 | Past due, history of delinquency in prior 12 months, or performing forborne | Past due |
Credit impaired | Default | Default | CRR9 to CRR10 | Past due by 90 days or more, forborne, under legal action or connected to other facilities with credit impaired status | Past due by 90 days or more, forborne, under legal action or connected to other facilities with credit impaired status |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 99 |
As at 31 Dec 2023 | ||||||||
Gross carrying/nominal amount | Allowance for ECL | Net | ||||||
Strong | Good | Satisfactory | Sub- standard | Credit impaired | Total | |||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |
In scope for IFRS 9 impairments | ||||||||
Loans and advances to customers held at amortised cost: | 997,889 | 1,174,816 | 704,572 | 151,682 | 100,362 | 3,129,321 | (45,478) | 3,083,843 |
– personal | 679,133 | 1,161,636 | 222,088 | 100,647 | 50,716 | 2,214,220 | (23,754) | 2,190,466 |
– corporate and commercial | 318,756 | 5,625 | 438,349 | 51,035 | 41,597 | 855,362 | (19,931) | 835,431 |
– non-bank financial institutions | — | 7,555 | 44,135 | — | 8,049 | 59,739 | (1,793) | 57,946 |
Loans and advances to banks held at amortised cost | 716,140 | — | — | — | — | 716,140 | — | 716,140 |
Other financial assets held at amortised cost: | ||||||||
Balances at central banks | 1,257,498 | — | — | — | — | 1,257,498 | (21) | 1,257,477 |
Items in the course of collection from other banks | 8,427 | — | — | — | — | 8,427 | — | 8,427 |
Debt instruments measured at amortised cost | 858,915 | — | — | — | — | 858,915 | (29) | 858,886 |
Accrued income and other assets | 11,676 | 1,984 | 4,135 | 790 | 7,998 | 26,583 | (4,673) | 21,910 |
– endorsements and acceptances | — | — | 240 | — | — | 240 | (1) | 239 |
– accrued income | 11,676 | 1,984 | 3,895 | 790 | 7,998 | 26,343 | (4,672) | 21,671 |
Total gross carrying amount on balance sheet | 3,850,545 | 1,176,800 | 708,707 | 152,472 | 108,360 | 5,996,884 | (50,201) | 5,946,683 |
Percentage of total credit quality | 64.2% | 19.6% | 11.8% | 2.6% | 1.8% | 100% | ||
Loan and other credit-related commitments | 377,203 | 93,190 | 342,857 | 21,341 | 4,068 | 838,659 | (1,230) | 837,429 |
Financial guarantees | 685 | 1 | 7,320 | 2,273 | — | 10,279 | (88) | 10,191 |
Total nominal amount off balance sheet | 377,888 | 93,191 | 350,177 | 23,614 | 4,068 | 848,938 | (1,318) | 847,620 |
At 31 Dec 2023 | 4,228,433 | 1,269,991 | 1,058,884 | 176,086 | 112,428 | 6,845,822 | (51,519) | 6,794,303 |
Fair value | ||||||||
Strong | Good | Satisfactory | Sub- standard | Credit impaired | Total | Allowance for ECL | ||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | ||
Debt instruments measured at fair value through other comprehensive income | 456,930 | — | — | — | — | 456,930 | (38) | |
Treasury Bills measured at fair value through other comprehensive income | 385,580 | — | — | — | — | 385,580 | (11) | |
At 31 Dec 2023 | 842,510 | — | — | — | — | 842,510 | (49) | |
100 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
As at 31 Dec 2022 | ||||||||
Gross carrying/nominal amount | Allowance for ECL | Net | ||||||
Strong | Good | Satisfactory | Sub- standard | Credit impaired | Total | |||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |
In scope for IFRS 9 impairments | ||||||||
Loans and advances to customers held at amortised cost: | 938,415 | 1,188,418 | 743,387 | 233,671 | 119,010 | 3,222,901 | (47,734) | 3,175,167 |
– personal | 637,076 | 1,186,794 | 294,342 | 104,870 | 63,152 | 2,286,234 | (24,710) | 2,261,524 |
– corporate and commercial | 301,326 | 1,624 | 396,841 | 121,996 | 50,886 | 872,673 | (20,669) | 852,004 |
– non-bank financial institutions | 13 | — | 52,204 | 6,805 | 4,972 | 63,994 | (2,355) | 61,639 |
Loans and advances to banks held at amortised cost | 726,218 | — | — | — | — | 726,218 | (1) | 726,217 |
Other financial assets held at amortised cost: | ||||||||
Balances at central banks | 1,269,367 | — | — | — | — | 1,269,367 | (13) | 1,269,354 |
Items in the course of collection from other banks | 6,921 | — | — | — | — | 6,921 | — | 6,921 |
Debt instruments measured at amortised cost | 367,042 | — | — | — | — | 367,042 | (18) | 367,024 |
Treasury Bills measured at amortised cost | 42,203 | — | — | — | — | 42,203 | (1) | 42,202 |
Accrued income and other assets | 7,138 | 2,169 | 4,375 | 1,300 | 8,756 | 23,738 | (5,564) | 18,174 |
– endorsements and acceptances | — | — | 1,500 | — | — | 1,500 | (5) | 1,495 |
– accrued income | 7,138 | 2,169 | 2,875 | 1,300 | 8,756 | 22,238 | (5,559) | 16,679 |
Total gross carrying amount on balance sheet | 3,357,304 | 1,190,587 | 747,762 | 234,971 | 127,766 | 5,658,390 | (53,331) | 5,605,059 |
Percentage of total credit quality | 59.3% | 21.0% | 13.2% | 4.2% | 2.3% | 100% | ||
Loan and other credit-related commitments | 404,974 | 84,587 | 295,629 | 48,531 | 8,599 | 842,320 | (1,173) | 841,147 |
Financial guarantees | 2,276 | — | 7,170 | 2,321 | 20 | 11,787 | (149) | 11,638 |
Total nominal amount off balance sheet | 407,250 | 84,587 | 302,799 | 50,852 | 8,619 | 854,107 | (1,322) | 852,785 |
At 31 Dec 2022 | 3,764,554 | 1,275,174 | 1,050,561 | 285,823 | 136,385 | 6,512,497 | (54,653) | 6,457,844 |
Strong | Good | Satisfactory | Sub- standard | Credit impaired | Total | Allowance for ECL | ||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | ||
Debt instruments measured at fair value through other comprehensive income | 637,709 | — | — | — | — | 637,709 | (60) | |
Treasury Bills measured at fair value through other comprehensive income | 242,292 | — | — | — | — | 242,292 | (4) | |
At 31 Dec 2022 | 880,001 | — | — | — | — | 880,001 | (64) | |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 101 |
Gross carrying/nominal amount | Allowance for ECL | ECL coverage % | ||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | % | % | % | % | |
Loans and advances to customers at amortised cost | 2,874,317 | 154,642 | 100,362 | 3,129,321 | (14,662) | (13,463) | (17,353) | (45,478) | 0.5 | 8.7 | 17.3 | 1.5 |
– personal | 2,062,416 | 101,088 | 50,716 | 2,214,220 | (7,719) | (8,433) | (7,602) | (23,754) | 0.4 | 8.3 | 15.0 | 1.1 |
– corporate and commercial | 760,211 | 53,554 | 41,597 | 855,362 | (6,241) | (5,030) | (8,660) | (19,931) | 0.8 | 9.4 | 20.8 | 2.3 |
– non-bank financial institutions | 51,690 | — | 8,049 | 59,739 | (702) | — | (1,091) | (1,793) | 1.4 | — | 13.6 | 3.0 |
Loans and advances to banks at amortised cost | 716,140 | — | — | 716,140 | — | — | — | — | — | — | — | — |
Other financial assets measured at amortised cost | 2,142,466 | 959 | 7,998 | 2,151,423 | (50) | (1) | (4,672) | (4,723) | — | 0.1 | 58.4 | 0.2 |
Loan and other credit-related commitments | 799,788 | 34,803 | 4,068 | 838,659 | (751) | (58) | (421) | (1,230) | 0.1 | 0.2 | 10.3 | 0.1 |
– personal | 291,001 | 2,276 | 182 | 293,459 | (28) | — | — | (28) | — | — | — | — |
– corporate and commercial (including non- bank financial institutions) | 497,181 | 32,527 | 3,886 | 533,594 | (723) | (58) | (421) | (1,202) | 0.1 | 0.2 | 10.8 | 0.2 |
– banks | 11,606 | — | — | 11,606 | — | — | — | — | — | — | — | — |
Financial guarantees | 10,029 | 250 | — | 10,279 | (66) | (22) | — | (88) | 0.7 | 8.8 | — | 0.9 |
– personal | 200 | — | — | 200 | — | — | — | — | — | — | — | — |
– corporate and commercial (including non- bank financial institutions) | 9,829 | 250 | — | 10,079 | (66) | (22) | — | (88) | 0.7 | 8.8 | — | 0.9 |
At 31 Dec 2023 | 6,542,740 | 190,654 | 112,428 | 6,845,822 | (15,529) | (13,544) | (22,446) | (51,519) | 0.2 | 7.1 | 20.0 | 0.8 |
102 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Gross exposure | Allowance for ECL | ECL coverage % | |||||||
Stage 2 | of which: | of which: | Stage 2 | of which: | of which: | Stage 2 | of which: | of which: | |
<30 DPD | >30 DPD | <30 DPD | >30 DPD | <30 DPD | >30 DPD | ||||
€000 | €000 | €000 | €000 | €000 | €000 | % | % | % | |
Loans and advances to customers at amortised cost: | 154,642 | 150,421 | 4,221 | (13,463) | (12,944) | (519) | 8.7 | 8.6 | 12.3 |
– personal | 101,088 | 97,245 | 3,843 | (8,433) | (7,923) | (510) | 8.3 | 8.1 | 13.3 |
– corporate and commercial | 53,554 | 53,176 | 378 | (5,030) | (5,021) | (9) | 9.4 | 9.4 | 2.4 |
Other financial assets measured at amortised cost | 959 | 936 | 23 | (1) | (1) | — | 0.1 | 0.1 | — |
Gross carrying/nominal amount | Allowance for ECL | ECL coverage % | ||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | % | % | % | % | |
Loans and advances to customers at amortised cost | 2,812,374 | 291,517 | 119,010 | 3,222,901 | (10,177) | (18,744) | (18,813) | (47,734) | 0.4 | 6.4 | 15.8 | 1.5 |
– personal | 2,112,941 | 110,141 | 63,152 | 2,286,234 | (6,671) | (8,716) | (9,323) | (24,710) | 0.3 | 7.9 | 14.8 | 1.1 |
– corporate and commercial | 682,367 | 139,420 | 50,886 | 872,673 | (3,272) | (8,168) | (9,229) | (20,669) | 0.5 | 5.9 | 18.1 | 2.4 |
– non-bank financial institutions | 17,066 | 41,956 | 4,972 | 63,994 | (234) | (1,860) | (261) | (2,355) | 1.4 | 4.4 | 5.2 | 3.7 |
Loans and advances to banks at amortised cost | 726,218 | — | — | 726,218 | (1) | — | — | (1) | — | — | — | — |
Other financial assets measured at amortised cost | 1,698,930 | 1,585 | 8,756 | 1,709,271 | (37) | — | (5,559) | (5,596) | — | — | 63.5 | 0.3 |
Loan and other credit- related commitments | 760,652 | 73,069 | 8,599 | 842,320 | (379) | (141) | (653) | (1,173) | — | 0.2 | 7.6 | 0.1 |
– personal | 350,204 | 8,648 | 381 | 359,233 | (26) | — | — | (26) | — | — | — | — |
– corporate and commercial (including non-bank financial institutions) | 408,072 | 64,421 | 8,218 | 480,711 | (353) | (141) | (653) | (1,147) | 0.1 | 0.2 | 7.9 | 0.2 |
– banks | 2,376 | — | — | 2,376 | — | — | — | — | — | — | — | — |
Financial guarantees | 11,535 | 232 | 20 | 11,787 | (110) | (39) | — | (149) | 1.0 | 16.8 | — | 1.3 |
– personal | 200 | — | — | 200 | — | — | — | — | — | — | — | — |
– corporate and commercial (including non-bank financial institutions) | 11,335 | 232 | 20 | 11,587 | (110) | (39) | — | (149) | 1.0 | 16.8 | — | 1.3 |
At 31 Dec 2022 | 6,009,709 | 366,403 | 136,385 | 6,512,497 | (10,704) | (18,924) | (25,025) | (54,653) | 0.2 | 5.2 | 18.3 | 0.8 |
Gross exposure | Allowance for ECL | ECL coverage % | |||||||
Stage 2 | of which: | of which: | Stage 2 | of which: | of which: | Stage 2 | of which: | of which: | |
<30 DPD | >30 DPD | <30 DPD | >30 DPD | <30 DPD | >30 DPD | ||||
€000 | €000 | €000 | €000 | €000 | €000 | % | % | % | |
Loans and advances to customers at amortised cost: | 291,517 | 288,474 | 3,043 | (18,744) | (18,300) | (444) | 6.4 | 6.3 | 14.6 |
– personal | 110,141 | 107,228 | 2,913 | (8,716) | (8,276) | (440) | 7.9 | 7.7 | 15.1 |
– corporate and commercial | 139,420 | 139,290 | 130 | (8,168) | (8,164) | (4) | 5.9 | 5.9 | 3.1 |
– non-bank financial institutions | 41,956 | 41,956 | — | (1,860) | (1,860) | — | 4.4 | 4.4 | — |
Other financial assets measured at amortised cost | 1,585 | 1,568 | 17 | — | — | — | — | — | — |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 103 |
Gross carrying/nominal amount | Allowance for ECL | Net | ||||||
Strong | Good | Satisfactory | Sub- standard | Credit impaired | Total | |||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |
Loans and advances to customers at amortised cost | 997,889 | 1,174,816 | 704,572 | 151,682 | 100,362 | 3,129,321 | (45,478) | 3,083,843 |
– stage 1 | 997,689 | 1,174,611 | 688,863 | 13,154 | — | 2,874,317 | (14,662) | 2,859,655 |
– stage 2 | 200 | 205 | 15,709 | 138,528 | — | 154,642 | (13,463) | 141,179 |
– stage 3 | — | — | — | — | 100,362 | 100,362 | (17,353) | 83,009 |
Loans and advances to banks at amortised cost | 716,140 | — | — | — | — | 716,140 | — | 716,140 |
– stage 1 | 716,140 | — | — | — | — | 716,140 | — | 716,140 |
– stage 2 | — | — | — | — | — | — | — | — |
– stage 3 | — | — | — | — | — | — | — | — |
Other financial assets measured at amortised cost | 2,136,516 | 1,984 | 4,135 | 790 | 7,998 | 2,151,423 | (4,723) | 2,146,700 |
– stage 1 | 2,136,514 | 1,984 | 3,825 | 143 | — | 2,142,466 | (50) | 2,142,416 |
– stage 2 | 2 | — | 310 | 647 | — | 959 | (1) | 958 |
– stage 3 | — | — | — | — | 7,998 | 7,998 | (4,672) | 3,326 |
Loan and other credit-related commitments | 377,203 | 93,190 | 342,857 | 21,341 | 4,068 | 838,659 | (1,230) | 837,429 |
– stage 1 | 377,145 | 93,045 | 322,711 | 6,887 | — | 799,788 | (751) | 799,037 |
– stage 2 | 58 | 145 | 20,146 | 14,454 | — | 34,803 | (58) | 34,745 |
– stage 3 | — | — | — | — | 4,068 | 4,068 | (421) | 3,647 |
Financial guarantees | 685 | 1 | 7,320 | 2,273 | — | 10,279 | (88) | 10,191 |
– stage 1 | 685 | 1 | 7,249 | 2,094 | — | 10,029 | (66) | 9,963 |
– stage 2 | — | — | 71 | 179 | — | 250 | (22) | 228 |
– stage 3 | — | — | — | — | — | — | — | — |
At 31 Dec 2023 | 4,228,433 | 1,269,991 | 1,058,884 | 176,086 | 112,428 | 6,845,822 | (51,519) | 6,794,303 |
Fair value | Allowance for ECL | |||||||
Strong | Good | Satisfactory | Sub- standard | Credit impaired | Total | |||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | ||
Debt instruments measured at fair value through other comprehensive income | 456,930 | — | — | — | — | 456,930 | (38) | |
– stage 1 | 456,930 | — | — | — | — | 456,930 | (38) | |
– stage 2 | — | — | — | — | — | — | — | |
– stage 3 | — | — | — | — | — | — | — | |
Treasury Bills measured at fair value through other comprehensive income | 385,580 | — | — | — | — | 385,580 | (11) | |
– stage 1 | 385,580 | — | — | — | — | 385,580 | (11) | |
– stage 2 | — | — | — | — | — | — | — | |
– stage 3 | — | — | — | — | — | — | — | |
At 31 Dec 2023 | 842,510 | — | — | — | — | 842,510 | (49) | |
104 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Gross carrying/nominal amount | Allowance for ECL | Net | ||||||
Strong | Good | Satisfactory | Sub- standard | Credit impaired | Total | |||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |
Loans and advances to customers at amortised cost | 938,415 | 1,188,418 | 743,387 | 233,671 | 119,010 | 3,222,901 | (47,734) | 3,175,167 |
– stage 1 | 938,172 | 1,188,340 | 671,025 | 14,837 | — | 2,812,374 | (10,177) | 2,802,197 |
– stage 2 | 243 | 78 | 72,362 | 218,834 | — | 291,517 | (18,744) | 272,773 |
– stage 3 | — | — | — | — | 119,010 | 119,010 | (18,813) | 100,197 |
Loans and advances to banks at amortised cost | 726,218 | — | — | — | — | 726,218 | (1) | 726,217 |
– stage 1 | 726,218 | — | — | — | — | 726,218 | (1) | 726,217 |
– stage 2 | — | — | — | — | — | — | — | — |
– stage 3 | — | — | — | — | — | — | — | — |
Other financial assets measured at amortised cost | 1,692,671 | 2,169 | 4,375 | 1,300 | 8,756 | 1,709,271 | (5,596) | 1,703,675 |
– stage 1 | 1,692,669 | 2,168 | 4,056 | 37 | — | 1,698,930 | (37) | 1,698,893 |
– stage 2 | 2 | 1 | 319 | 1,263 | — | 1,585 | — | 1,585 |
– stage 3 | — | — | — | — | 8,756 | 8,756 | (5,559) | 3,197 |
Loan and other credit-related commitments | 404,974 | 84,587 | 295,629 | 48,531 | 8,599 | 842,320 | (1,173) | 841,147 |
– stage 1 | 404,962 | 84,517 | 261,886 | 9,287 | — | 760,652 | (379) | 760,273 |
– stage 2 | 12 | 70 | 33,743 | 39,244 | — | 73,069 | (141) | 72,928 |
– stage 3 | — | — | — | — | 8,599 | 8,599 | (653) | 7,946 |
Financial guarantees | 2,276 | — | 7,170 | 2,321 | 20 | 11,787 | (149) | 11,638 |
– stage 1 | 2,276 | — | 7,147 | 2,112 | — | 11,535 | (110) | 11,425 |
– stage 2 | — | — | 23 | 209 | — | 232 | (39) | 193 |
– stage 3 | — | — | — | — | 20 | 20 | — | 20 |
At 31 Dec 2022 | 3,764,554 | 1,275,174 | 1,050,561 | 285,823 | 136,385 | 6,512,497 | (54,653) | 6,457,844 |
Fair value | Allowance for ECL | ||||||
Strong | Good | Satisfactory | Sub- standard | Credit impaired | Total | ||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | |
Debt instruments measured at fair value through other comprehensive income | 637,709 | — | — | — | — | 637,709 | (60) |
– stage 1 | 637,709 | — | — | — | — | 637,709 | (60) |
– stage 2 | — | — | — | — | — | — | — |
– stage 3 | — | — | — | — | — | — | — |
Treasury Bills measured at fair value through other comprehensive income | 242,292 | — | — | — | — | 242,292 | (4) |
– stage 1 | 242,292 | — | — | — | — | 242,292 | (4) |
– stage 2 | — | — | — | — | — | — | — |
– stage 3 | — | — | — | — | — | — | — |
At 31 Dec 2022 | 880,001 | — | — | — | — | 880,001 | (64) |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 105 |
Non-credit impaired | Credit impaired | Total | ||||||
Stage 1 | Stage 2 | Stage 3 | ||||||
Gross carrying/ nominal amount | Allowance for ECL | Gross carrying/ nominal amount | Allowance for ECL | Gross carrying/ nominal amount | Allowance for ECL | Gross carrying/ nominal amount | Allowance for ECL | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |
At 1 Jan 2023 | 3,590,772 | (10,671) | 366,403 | (18,924) | 136,385 | (25,025) | 4,093,560 | (54,620) |
Transfers of financial instruments | 134,477 | (7,566) | (134,836) | 6,602 | 359 | 964 | — | — |
– transfers from stage 1 to stage 2 | (61,515) | 317 | 61,515 | (317) | — | — | — | — |
– transfers from stage 2 to stage 1 | 197,343 | (7,567) | (197,343) | 7,567 | — | — | — | — |
– transfers from stage 3 | 1,827 | (338) | 5,284 | (1,007) | (7,111) | 1,345 | — | — |
– transfers to stage 3 | (3,178) | 22 | (4,292) | 359 | 7,470 | (381) | — | — |
Net remeasurement of ECL arising from stage transfers | — | 5,495 | — | (2,327) | — | (719) | — | 2,449 |
Changes in risk parameters | — | (2,147) | — | (2,048) | — | (803) | — | (4,998) |
Net new and further lending/repayments | (43,504) | (590) | (40,913) | 3,153 | (23,749) | 2,570 | (108,166) | 5,133 |
Assets written off | — | — | — | — | (567) | 567 | (567) | 567 |
At 31 Dec 2023 | 3,681,745 | (15,479) | 190,654 | (13,544) | 112,428 | (22,446) | 3,984,827 | (51,469) |
ECL change for the year | 3,151 | |||||||
Assets written off | (567) | |||||||
Change in expected credit losses excluding effect of write-offs | 2,584 | |||||||
Recoveries | 1,466 | |||||||
Other | 532 | |||||||
Change in expected credit losses and other credit impairment charges | 4,582 | |||||||
At 31 Dec 2023 | 12 months ended 31 Dec 2023 | ||
Allowance for ECL | ECL (charge)/ release | ||
As above | 3,984,827 | (51,469) | 4,582 |
Balances at central banks | 1,257,498 | (21) | (8) |
Loans and advances to banks measured at amortised cost | 716,140 | — | 1 |
Debt instruments and Treasury Bills measured at amortised cost | 858,915 | (29) | (10) |
Items in course of collection | 8,427 | — | — |
Accrued interest on debt instruments and other accrued income | 8,409 | — | — |
Loan and other credit related commitments - banks | 11,606 | — | — |
Summary of financial instruments to which the impairment requirements in IFRS 9 are applied through the Income Statement | 6,845,822 | (51,519) | 4,565 |
Debt instruments and Treasury Bills measured at fair value through other comprehensive income | 842,510 | (49) | 15 |
Total allowance for ECL/total income statement ECL release for the year | N/A | (51,568) | 4,580 |
106 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Non-credit impaired | Credit impaired | Total | ||||||
Stage 1 | Stage 2 | Stage 3 | ||||||
Gross carrying/ nominal amount | Allowance for ECL | Gross carrying/ nominal amount | Allowance for ECL | Gross carrying/ nominal amount | Allowance for ECL | Gross carrying/ nominal amount | Allowance for ECL | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |
At 1 Jan 2022 | 3,694,260 | (15,252) | 337,784 | (16,042) | 192,459 | (37,690) | 4,224,503 | (68,984) |
Transfers of financial instruments: | (74,149) | (428) | 86,184 | (1,752) | (12,035) | 2,180 | — | — |
– transfers from stage 1 to stage 2 | (105,626) | 563 | 105,626 | (563) | — | — | — | — |
– transfers from stage 2 to stage 1 | 33,571 | (734) | (33,571) | 734 | — | — | — | — |
– transfers from stage 3 | 3,168 | (284) | 20,652 | (2,359) | (23,820) | 2,643 | — | — |
– transfers to stage 3 | (5,262) | 27 | (6,523) | 436 | 11,785 | (463) | — | — |
Net remeasurement of ECL arising from stage transfers | — | 899 | — | (5,282) | — | (684) | — | (5,067) |
Changes in risk parameters | — | 4,143 | — | 1,826 | — | (6,599) | — | (630) |
Net new and further lending/repayments | (29,339) | (33) | (57,565) | 2,326 | (28,835) | 2,564 | (115,739) | 4,857 |
Assets written off | — | — | — | — | (15,204) | 15,204 | (15,204) | 15,204 |
At 31 Dec 2022 | 3,590,772 | (10,671) | 366,403 | (18,924) | 136,385 | (25,025) | 4,093,560 | (54,620) |
ECL change for the year | 14,364 | |||||||
Assets written off | (15,204) | |||||||
Change in expected credit losses excluding effects of write-offs | (840) | |||||||
Recoveries | 9,359 | |||||||
Other | 1,053 | |||||||
Change in expected credit losses and other credit impairment charges | 9,572 | |||||||
At 31 Dec 2022 | 12 months ended 31 Dec 2022 | |||||||
Gross carrying/ nominal amount | Allowance for ECL | ECL (charge)/ release | ||||||
As above | 4,093,560 | (54,620) | 9,572 | |||||
Balances at central banks | 1,269,367 | (13) | (5) | |||||
Loans and advances to banks measured at amortised cost | 726,218 | (1) | 1 | |||||
Debt instruments and Treasury Bills measured at amortised cost | 409,245 | (19) | (19) | |||||
Items in course of collection | 6,921 | — | — | |||||
Accrued interest on debt instruments and other accrued income | 4,810 | — | — | |||||
Loan and other credit related commitments - banks | 2,376 | — | — | |||||
Summary of financial instruments to which the impairment requirements in IFRS 9 are applied through the Income Statement | 6,512,497 | (54,653) | 9,549 | |||||
Debt instruments and Treasury Bills measured at fair value through other comprehensive income | 880,001 | (64) | 12 | |||||
Total allowance for ECL/total income statement ECL charge for the year | N/A | (54,717) | 9,561 | |||||
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 107 |
Stage 1 | Stage 2 | Stage 3 | Total | |
Loans and advances to customers | €000 | €000 | €000 | €000 |
WPB | 7,741 | 8,410 | 7,602 | 23,753 |
CMB | 6,921 | 5,053 | 9,751 | 21,725 |
At 31 Dec 2023 | 14,662 | 13,463 | 17,353 | 45,478 |
Loan and other credit-related commitments and financial guarantees | ||||
WPB | 28 | — | — | 28 |
CMB | 789 | 80 | 421 | 1,290 |
At 31 Dec 2023 | 817 | 80 | 421 | 1,318 |
Loans and advances to customers | ||||
WPB | 6,682 | 8,705 | 9,320 | 24,707 |
CMB | 3,495 | 10,039 | 9,493 | 23,027 |
At 31 Dec 2022 | 10,177 | 18,744 | 18,813 | 47,734 |
Loan and other credit-related commitments and financial guarantees | ||||
WPB | 26 | — | — | 26 |
CMB | 463 | 180 | 653 | 1,296 |
At 31 Dec 2022 | 489 | 180 | 653 | 1,322 |
108 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Stage 1 | Stage 2 | Stage 3 | Total | |
€000 | €000 | €000 | €000 | |
Gross carrying amount | ||||
Personal | ||||
– first lien residential mortgages | — | 27,605 | 18,060 | 45,665 |
– other personal lending | — | 3,331 | 2,951 | 6,282 |
Wholesale | ||||
– corporate and commercial | — | 3,023 | 37,487 | 40,510 |
– non-bank financial institutions | — | — | 8,044 | 8,044 |
At 31 Dec 2023 | — | 33,959 | 66,542 | 100,501 |
Allowance for ECL | ||||
Personal | ||||
– first lien residential mortgages | — | (1,521) | (1,586) | (3,107) |
– other personal lending | — | (159) | (316) | (475) |
Wholesale | ||||
– corporate and commercial | — | (267) | (6,781) | (7,048) |
– non-bank financial institutions | — | — | (1,091) | (1,091) |
At 31 Dec 2023 | — | (1,947) | (9,774) | (11,721) |
Gross carrying amount | ||||
Personal | ||||
– first lien residential mortgages | — | 27,403 | 23,048 | 50,451 |
– other personal lending | — | 3,352 | 4,252 | 7,604 |
Wholesale | ||||
– corporate and commercial | — | 20,314 | 44,469 | 64,783 |
– non-bank financial institutions | — | 7,473 | 4,972 | 12,445 |
At 31 Dec 2022 | — | 58,542 | 76,741 | 135,283 |
Allowance for ECL | ||||
Personal | ||||
– first lien residential mortgages | — | (1,798) | (2,883) | (4,681) |
– other personal lending | — | (278) | (516) | (794) |
Wholesale | ||||
– corporate and commercial | — | (2,465) | (6,246) | (8,711) |
– non-bank financial institutions | — | (584) | (261) | (845) |
At 31 Dec 2022 | — | (5,125) | (9,906) | (15,031) |
2023 | 2022 | |
€000 | €000 | |
Total forborne loans and advances to customers as a percentage of total gross loans and advances to customers | 3.2% | 4.2% |
Interest income recognised in respect of forborne assets | 4,336 | 5,860 |
Movement in forbearance activity during the year: | ||
At 1 Jan | 135,283 | 183,893 |
Loans granted forbearance measures during the year | 2,690 | 8,978 |
Repayments | (37,404) | (49,870) |
Amounts written off | (68) | (7,718) |
At 31 Dec | 100,501 | 135,283 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 109 |
Gross carrying amount | Allowance for ECL | |||||||
Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |
Corporate and commercial | 760,211 | 53,554 | 41,597 | 855,362 | (6,241) | (5,030) | (8,660) | (19,931) |
– agriculture, forestry and fishing | 163 | 9 | 25 | 197 | (2) | — | (25) | (27) |
– manufacture | 96,035 | 8,194 | 3,183 | 107,412 | (373) | (880) | (622) | (1,875) |
– electricity, gas, steam and air-conditioning supply | 63,757 | 1,881 | — | 65,638 | (264) | (81) | — | (345) |
– water supply, sewerage, waste management and remediation | 16,731 | — | — | 16,731 | (6) | — | — | (6) |
– construction | 15,894 | 428 | 5,680 | 22,002 | (197) | (27) | (1,513) | (1,737) |
– wholesale and retail trade, repair of motor vehicles and motorcycles | 115,984 | 20,714 | 4,473 | 141,171 | (885) | (1,084) | (1,632) | (3,601) |
– transportation and storage | 5,505 | 76 | 2 | 5,583 | (251) | (2) | (1) | (254) |
– accommodation and food | 23,856 | 9,896 | 17,238 | 50,990 | (652) | (406) | (2,772) | (3,830) |
– information and communication | 20,766 | 2,794 | 46 | 23,606 | (346) | (981) | — | (1,327) |
– real estate | 68,981 | 3,929 | 6,558 | 79,468 | (1,273) | (1,070) | (60) | (2,403) |
– professional, scientific and technical activities | 129,631 | 5,366 | 157 | 135,154 | (1,034) | (436) | (7) | (1,477) |
– administrative and support services | 20,033 | 183 | 411 | 20,627 | (587) | (62) | — | (649) |
– education | 192 | — | 1,151 | 1,343 | (4) | — | (168) | (172) |
– health and care | 15,816 | 13 | 2,448 | 18,277 | (321) | — | (1,784) | (2,105) |
– arts, entertainment and recreation | 192 | 5 | 83 | 280 | (1) | — | (17) | (18) |
– other services | 1,767 | 66 | 142 | 1,975 | (29) | (1) | (59) | (89) |
– public administration and defence, compulsory social security | 164,908 | — | — | 164,908 | (16) | — | — | (16) |
Non-bank financial institutions | 51,690 | — | 8,049 | 59,739 | (702) | — | (1,091) | (1,793) |
At 31 Dec 2023 | 811,901 | 53,554 | 49,646 | 915,101 | (6,943) | (5,030) | (9,751) | (21,724) |
Other financial assets measured at amortised cost | ||||||||
– endorsements and acceptances | — | 240 | — | 240 | — | (1) | — | (1) |
– accrued income | 5,448 | 274 | 4,574 | 10,296 | — | — | (1,825) | (1,825) |
At 31 Dec 2023 | 5,448 | 514 | 4,574 | 10,536 | — | (1) | (1,825) | (1,826) |
Corporate and commercial | 682,367 | 139,420 | 50,886 | 872,673 | (3,272) | (8,168) | (9,229) | (20,669) |
– agriculture, forestry and fishing | 51 | 128 | 97 | 276 | (1) | (2) | (6) | (9) |
– manufacture | 50,050 | 8,182 | 3,541 | 61,773 | (362) | (309) | (496) | (1,167) |
– electricity, gas, steam and air-conditioning supply | 85,018 | 2,056 | — | 87,074 | (204) | (132) | — | (336) |
– water supply, sewerage, waste management and remediation | 23,746 | 217 | — | 23,963 | (5) | (1) | — | (6) |
– construction | 18,311 | 1,686 | 2,102 | 22,099 | (177) | (60) | (1,521) | (1,758) |
– wholesale and retail trade, repair of motor vehicles and motorcycles | 135,304 | 36,384 | 7,948 | 179,636 | (611) | (806) | (2,944) | (4,361) |
– transportation and storage | 5,170 | 547 | 8 | 5,725 | (21) | (22) | (8) | (51) |
– accommodation and food | 17,494 | 40,648 | 20,984 | 79,126 | (347) | (3,207) | (2,353) | (5,907) |
– information and communication | 23,522 | 4,122 | 1 | 27,645 | (268) | (970) | (1) | (1,239) |
– real estate | 71,443 | 5,041 | 9,765 | 86,249 | (745) | (355) | (299) | (1,399) |
– professional, scientific and technical activities | 90,225 | 17,927 | 13 | 108,165 | (373) | (1,110) | (12) | (1,495) |
– administrative and support services | 5,875 | 7,338 | 413 | 13,626 | (93) | (463) | (2) | (558) |
– education | 530 | 18 | 3,188 | 3,736 | (8) | — | (726) | (734) |
– health and care | 1,666 | 14,748 | 2,435 | 18,849 | (20) | (724) | (787) | (1,531) |
– arts, entertainment and recreation | 197 | 23 | 68 | 288 | — | (1) | — | (1) |
– other services | 1,263 | 355 | 323 | 1,941 | (18) | (6) | (74) | (98) |
– public administration and defence, compulsory social security | 152,502 | — | — | 152,502 | (19) | — | — | (19) |
Non-bank financial institutions | 17,066 | 41,956 | 4,972 | 63,994 | (234) | (1,860) | (261) | (2,355) |
At 31 Dec 2022 | 699,433 | 181,376 | 55,858 | 936,667 | (3,506) | (10,028) | (9,490) | (23,024) |
Other financial assets measured at amortised cost | ||||||||
– endorsements and acceptances | 1,500 | — | — | 1,500 | (5) | — | — | (5) |
– accrued income | 3,055 | 1,084 | 4,754 | 8,893 | — | — | (2,424) | (2,424) |
At 31 Dec 2022 | 4,555 | 1,084 | 4,754 | 10,393 | (5) | — | (2,424) | (2,429) |
Nominal amount | Allowance for ECL | |||||||
Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |
Corporate and commercial | 497,588 | 32,739 | 3,886 | 534,213 | (781) | (77) | (421) | (1,279) |
Non-bank financial institutions | 9,422 | 38 | — | 9,460 | (8) | (3) | — | (11) |
At 31 Dec 2023 | 507,010 | 32,777 | 3,886 | 543,673 | (789) | (80) | (421) | (1,290) |
Corporate and commercial | 402,793 | 59,656 | 6,841 | 469,290 | (444) | (178) | (652) | (1,274) |
Non-bank financial institutions | 16,614 | 4,997 | 1,397 | 23,008 | (19) | (2) | (1) | (22) |
At 31 Dec 2022 | 419,407 | 64,653 | 8,238 | 492,298 | (463) | (180) | (653) | (1,296) |
110 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Non-credit impaired | Credit impaired | Total | ||||||||||||||
Stage 1 | Stage 2 | Stage 3 | ||||||||||||||
Gross carrying/ nominal amount | Allowance for ECL | Gross carrying/ nominal amount | Allowance for ECL | Gross carrying/ nominal amount | Allowance for ECL | Gross carrying/ nominal amount | Allowance for ECL | |||||||||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |||||||||
At 1 Jan 2023 | 1,123,395 | (3,974) | 247,113 | (10,208) | 68,850 | (12,567) | 1,439,358 | (26,749) | ||||||||
Transfers of financial instruments | 129,885 | (4,392) | (131,237) | 4,446 | 1,352 | (54) | — | — | ||||||||
– transfers from stage 1 to stage 2 | (27,648) | 199 | 27,648 | (199) | — | — | — | — | ||||||||
– transfers from stage 2 to stage 1 | 158,355 | (4,605) | (158,355) | 4,605 | — | — | — | — | ||||||||
– transfers from stage 3 | 172 | — | 75 | — | (247) | — | — | — | ||||||||
– transfers to stage 3 | (994) | 14 | (605) | 40 | 1,599 | (54) | — | — | ||||||||
Net remeasurement of ECL arising from stage transfers | — | 2,346 | — | (732) | — | 32 | — | 1,646 | ||||||||
Changes in risk parameters | — | (833) | — | (929) | — | — | — | (1,762) | ||||||||
Net new and further lending/ repayments | 71,079 | (879) | (29,031) | 2,312 | (12,033) | 529 | 30,015 | 1,962 | ||||||||
Assets written off | — | — | — | — | (63) | 63 | (63) | 63 | ||||||||
At 31 Dec 2023 | 1,324,359 | (7,732) | 86,845 | (5,111) | 58,106 | (11,997) | 1,469,310 | (24,840) | ||||||||
ECL change for the year | 1,909 | |||||||||||||||
Assets written off | (63) | |||||||||||||||
Change in expected credit losses excluding effect of write-offs | 1,846 | |||||||||||||||
Recoveries | 893 | |||||||||||||||
Other | 534 | |||||||||||||||
Change in expected credit losses and other credit impairment charges | 3,273 | |||||||||||||||
Non - credit impaired | Credit impaired | Total | ||||||||||||||
Stage 1 | Stage 2 | Stage 3 | ||||||||||||||
Gross carrying/ nominal amount | Allowance for ECL | Gross carrying/ nominal amount | Allowance for ECL | Gross carrying/ nominal amount | Allowance for ECL | Gross carrying/ nominal amount | Allowance for ECL | |||||||||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |||||||||
At 1 Jan 2022 | 1,142,186 | (3,305) | 279,429 | (11,656) | 98,496 | (27,533) | 1,520,111 | (42,494) | ||||||||
Transfers of financial instruments : | (15,216) | (61) | 14,100 | 94 | 1,116 | (33) | — | — | ||||||||
– transfers from stage 1 to stage 2 | (40,221) | 220 | 40,221 | (220) | — | — | — | — | ||||||||
– transfers from stage 2 to stage 1 | 25,700 | (285) | (25,700) | 285 | — | — | — | — | ||||||||
– transfers from stage 3 | — | — | — | — | — | — | — | — | ||||||||
– transfers to stage 3 | (695) | 4 | (421) | 29 | 1,116 | (33) | — | — | ||||||||
— | 216 | — | (1,331) | — | (28) | — | (1,143) | |||||||||
Changes in risk parameters | — | (751) | — | 902 | — | (595) | — | (444) | ||||||||
Net new and further lending/ repayments | (3,575) | (73) | (46,416) | 1,783 | (17,320) | 2,180 | (67,311) | 3,890 | ||||||||
Assets written off | — | — | — | — | (13,442) | 13,442 | (13,442) | 13,442 | ||||||||
At 31 Dec 2022 | 1,123,395 | (3,974) | 247,113 | (10,208) | 68,850 | (12,567) | 1,439,358 | (26,749) | ||||||||
ECL change for the year | 15,745 | |||||||||||||||
Assets written off | (13,442) | |||||||||||||||
Change in expected credit losses excluding effect of write-offs | 2,303 | |||||||||||||||
Recoveries | 8,880 | |||||||||||||||
Other | 1,072 | |||||||||||||||
Change in expected credit losses and other credit impairment charges | 12,255 | |||||||||||||||
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 111 |
Gross exposure/nominal amount | Allowance for ECL | Net | ||||||
Strong | Good | Satisfactory | Sub- standard | Credit Impaired | Total | |||
Corporate and commercial | 162,195 | 18,280 | 328,283 | 21,569 | 3,886 | 534,213 | (1,279) | 532,934 |
Non-bank financial institutions | — | 10 | 9,435 | 15 | — | 9,460 | (11) | 9,449 |
At 31 Dec 2023 | 162,195 | 18,290 | 337,718 | 21,584 | 3,886 | 543,673 | (1,290) | 542,383 |
Corporate and commercial | 143,290 | 8,249 | 268,788 | 42,122 | 6,841 | 469,290 | (1,274) | 468,016 |
Non-bank financial institutions | 2,000 | — | 14,337 | 5,274 | 1,397 | 23,008 | (22) | 22,986 |
At 31 Dec 2022 | 145,290 | 8,249 | 283,125 | 47,396 | 8,238 | 492,298 | (1,296) | 491,002 |
Gross carrying amount | Allowance for ECL | ||||||||
Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | ECL Coverage | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | % | |
Corporate and Commercial | 760,211 | 53,554 | 41,597 | 855,362 | (6,241) | (5,030) | (8,660) | (19,931) | 2.3 |
CRR1 | 160,006 | 1 | — | 160,007 | (16) | — | — | (16) | — |
CRR2 | 158,749 | — | — | 158,749 | (36) | — | — | (36) | — |
CRR3 | 5,625 | — | — | 5,625 | (29) | — | — | (29) | 0.5 |
CRR4 | 271,849 | 1,300 | — | 273,149 | (2,947) | (20) | — | (2,967) | 1.1 |
CRR5 | 150,828 | 14,372 | — | 165,200 | (2,851) | (569) | — | (3,420) | 2.1 |
CRR6 | 10,959 | 9,757 | — | 20,716 | (150) | (1,068) | — | (1,218) | 5.9 |
CRR7 | 2,177 | 21,170 | — | 23,347 | (212) | (1,128) | — | (1,340) | 5.7 |
CRR8 | 18 | 6,954 | — | 6,972 | — | (2,245) | — | (2,245) | 32.2 |
CRR9/10 | — | — | 41,597 | 41,597 | — | — | (8,660) | (8,660) | 20.8 |
Non-bank financial institutions | 51,690 | — | 8,049 | 59,739 | (702) | — | (1,091) | (1,793) | 3.0 |
CRR1 | — | — | — | — | — | — | — | — | — |
CRR2 | — | — | — | — | — | — | — | — | — |
CRR3 | 7,555 | — | — | 7,555 | — | — | — | — | — |
CRR4 | 40,982 | — | — | 40,982 | (647) | — | — | (647) | 1.6 |
CRR5 | 3,153 | — | — | 3,153 | (55) | — | — | (55) | 1.7 |
CRR6 | — | — | — | — | — | — | — | — | — |
CRR7 | — | — | — | — | — | — | — | — | — |
CRR8 | — | — | — | — | — | — | — | — | — |
CRR9/10 | — | — | 8,049 | 8,049 | — | — | (1,091) | (1,091) | 13.6 |
At 31 Dec 2023 | 811,901 | 53,554 | 49,646 | 915,101 | (6,943) | (5,030) | (9,751) | (21,724) | 2.4 |
Corporate and Commercial | 682,367 | 139,420 | 50,886 | 872,673 | (3,272) | (8,168) | (9,229) | (20,669) | 2.4 |
CRR1 | 145,974 | — | — | 145,974 | (16) | — | — | (16) | — |
CRR2 | 155,352 | — | — | 155,352 | (32) | — | — | (32) | — |
CRR3 | 1,576 | 48 | — | 1,624 | (3) | — | — | (3) | 0.2 |
CRR4 | 194,632 | 2,167 | — | 196,799 | (875) | (10) | — | (885) | 0.4 |
CRR5 | 170,003 | 30,039 | — | 200,042 | (1,978) | (1,081) | — | (3,059) | 1.5 |
CRR6 | 14,773 | 66,079 | — | 80,852 | (367) | (3,156) | — | (3,523) | 4.4 |
CRR7 | 57 | 36,070 | — | 36,127 | (1) | (2,719) | — | (2,720) | 7.5 |
CRR8 | — | 5,017 | — | 5,017 | — | (1,202) | — | (1,202) | 24.0 |
CRR9/10 | — | — | 50,886 | 50,886 | — | — | (9,229) | (9,229) | 18.1 |
Non-bank financial institutions | 17,066 | 41,956 | 4,972 | 63,994 | (234) | (1,860) | (261) | (2,355) | 3.7 |
CRR1 | 13 | — | — | 13 | — | — | — | — | — |
CRR2 | — | — | — | — | — | — | — | — | — |
CRR3 | — | — | — | — | — | — | — | — | — |
CRR4 | 2,919 | — | — | 2,919 | (20) | — | — | (20) | 0.7 |
CRR5 | 14,128 | 35,157 | — | 49,285 | (214) | (1,347) | — | (1,561) | 3.2 |
CRR6 | 6 | 1,638 | — | 1,644 | — | (338) | — | (338) | 20.6 |
CRR7 | — | 5,161 | — | 5,161 | — | (175) | — | (175) | 3.4 |
CRR8 | — | — | — | — | — | — | — | — | — |
CRR9/10 | — | — | 4,972 | 4,972 | — | — | (261) | (261) | 5.2 |
At 31 Dec 2022 | 699,433 | 181,376 | 55,858 | 936,667 | (3,506) | (10,028) | (9,490) | (23,024) | 2.5 |
112 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Gross carrying amount | Allowance for ECL | |||||||
Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |
By portfolio | ||||||||
First lien residential mortgages | 1,906,051 | 91,611 | 42,833 | 2,040,495 | (7,044) | (7,218) | (6,240) | (20,502) |
Other personal lending | 156,365 | 9,477 | 7,883 | 173,725 | (675) | (1,215) | (1,362) | (3,252) |
– second lien residential mortgages | 77,123 | 6,926 | 7,029 | 91,078 | (260) | (322) | (895) | (1,477) |
– credit cards | 25,912 | 1,455 | 59 | 27,426 | (304) | (631) | (42) | (977) |
– other | 53,330 | 1,096 | 795 | 55,221 | (111) | (262) | (425) | (798) |
At 31 Dec 2023 | 2,062,416 | 101,088 | 50,716 | 2,214,220 | (7,719) | (8,433) | (7,602) | (23,754) |
Other financial assets measured at amortised cost | ||||||||
– accrued income | 3,769 | 445 | 3,424 | 7,638 | — | — | (2,847) | (2,847) |
At 31 Dec 2023 | 3,769 | 445 | 3,424 | 7,638 | — | — | (2,847) | (2,847) |
By portfolio | ||||||||
First lien residential mortgages | 1,954,743 | 92,233 | 53,033 | 2,100,009 | (6,161) | (6,566) | (7,698) | (20,425) |
Other personal lending | 158,198 | 17,908 | 10,119 | 186,225 | (510) | (2,150) | (1,625) | (4,285) |
– second lien residential mortgages | 79,905 | 8,271 | 9,029 | 97,205 | (208) | (326) | (927) | (1,461) |
– credit cards | 24,792 | 3,143 | 88 | 28,023 | (227) | (1,260) | (56) | (1,543) |
– other | 53,501 | 6,494 | 1,002 | 60,997 | (75) | (564) | (642) | (1,281) |
At 31 Dec 2022 | 2,112,941 | 110,141 | 63,152 | 2,286,234 | (6,671) | (8,716) | (9,323) | (24,710) |
Other financial assets measured at amortised cost | ||||||||
– accrued income | 4,032 | 501 | 4,002 | 8,535 | — | — | (3,135) | (3,135) |
At 31 Dec 2022 | 4,032 | 501 | 4,002 | 8,535 | — | — | (3,135) | (3,135) |
Nominal amount | Allowance for ECL | |||||||
Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |
Personal | 291,201 | 2,276 | 182 | 293,659 | (28) | — | — | (28) |
At 31 Dec 2023 | 291,201 | 2,276 | 182 | 293,659 | (28) | — | — | (28) |
Personal | 350,404 | 8,648 | 381 | 359,433 | (26) | — | — | (26) |
At 31 Dec 2022 | 350,404 | 8,648 | 381 | 359,433 | (26) | — | — | (26) |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 113 |
Non-credit impaired | Credit impaired | Total | ||||||||||||||
Stage 1 | Stage 2 | Stage 3 | ||||||||||||||
Gross carrying/ nominal amount | Allowance for ECL | Gross carrying/ nominal amount | Allowance for ECL | Gross carrying/ nominal amount | Allowance for ECL | Gross carrying/ nominal amount | Allowance for ECL | |||||||||
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |||||||||
At 1 Jan 2023 | 2,467,377 | (6,697) | 119,290 | (8,716) | 67,535 | (12,458) | 2,654,202 | (27,871) | ||||||||
Transfers of financial instruments | 4,592 | (3,174) | (3,599) | 2,156 | (993) | 1,018 | — | — | ||||||||
– transfers from stage 1 to stage 2 | (33,867) | 118 | 33,867 | (118) | — | — | — | — | ||||||||
– transfers from stage 2 to stage 1 | 38,988 | (2,962) | (38,988) | 2,962 | — | — | — | — | ||||||||
– transfers from stage 3 | 1,655 | (338) | 5,209 | (1,007) | (6,864) | 1,345 | — | — | ||||||||
– transfers to stage 3 | (2,184) | 8 | (3,687) | 319 | 5,871 | (327) | — | — | ||||||||
Net remeasurement of ECL arising from stage transfers | — | 3,149 | — | (1,595) | — | (751) | — | 803 | ||||||||
Changes in risk parameters | — | (1,314) | — | (1,119) | — | (803) | — | (3,236) | ||||||||
Net new and further lending/ repayments | (114,583) | 289 | (11,882) | 841 | (11,716) | 2,041 | (138,181) | 3,171 | ||||||||
Assets written off | — | — | — | — | (504) | 504 | (504) | 504 | ||||||||
At 31 Dec 2023 | 2,357,386 | (7,747) | 103,809 | (8,433) | 54,322 | (10,449) | 2,515,517 | (26,629) | ||||||||
ECL change for the year | 1,242 | |||||||||||||||
Assets written off | (504) | |||||||||||||||
Change in expected credit losses excluding effect of write-offs | 738 | |||||||||||||||
Recoveries | 573 | |||||||||||||||
Other | (2) | |||||||||||||||
Change in expected credit losses and other credit impairment charges | 1,309 | |||||||||||||||
At 1 Jan 2022 | 2,552,074 | (11,947) | 58,355 | (4,386) | 93,963 | (10,157) | 2,704,392 | (26,490) | ||||||||
Transfers of financial instruments : | (58,933) | (367) | 72,084 | (1,846) | (13,151) | 2,213 | — | — | ||||||||
– transfers from stage 1 to stage 2 | (65,405) | 343 | 65,405 | (343) | — | — | — | — | ||||||||
– transfers from stage 2 to stage 1 | 7,871 | (449) | (7,871) | 449 | — | — | — | — | ||||||||
– transfers from stage 3 | 3,168 | (284) | 20,652 | (2,359) | (23,820) | 2,643 | — | — | ||||||||
– transfers to stage 3 | (4,567) | 23 | (6,102) | 407 | 10,669 | (430) | — | — | ||||||||
Net remeasurement of ECL arising from stage transfers | — | 683 | — | (3,951) | — | (656) | — | (3,924) | ||||||||
Changes in risk parameters | — | 4,894 | — | 924 | — | (6,004) | — | (186) | ||||||||
Net new and further lending/ repayments | (25,764) | 40 | (11,149) | 543 | (11,515) | 384 | (48,428) | 967 | ||||||||
Assets written off | — | — | — | — | (1,762) | 1,762 | (1,762) | 1,762 | ||||||||
At 31 Dec 2022 | 2,467,377 | (6,697) | 119,290 | (8,716) | 67,535 | (12,458) | 2,654,202 | (27,871) | ||||||||
ECL change for the year | (1,381) | |||||||||||||||
Assets written off | (1,762) | |||||||||||||||
Change in expected credit losses for the year | (3,143) | |||||||||||||||
Recoveries | 479 | |||||||||||||||
Other | (19) | |||||||||||||||
Change in expected credit losses and other credit impairment charges | (2,683) | |||||||||||||||
114 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Gross carrying amount | Allowance for ECL | ||||||||
Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | ECL Coverage | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | % | |
First lien residential mortgages | 1,906,051 | 91,611 | 42,833 | 2,040,495 | (7,044) | (7,218) | (6,240) | (20,502) | 1.0 |
Not past due | 1,902,457 | 75,594 | 14,412 | 1,992,463 | (7,030) | (5,757) | (1,371) | (14,158) | 0.7 |
Past due by: | |||||||||
less than 30 days | 3,594 | 12,888 | 8,887 | 25,369 | (14) | (1,110) | (754) | (1,878) | 7.4 |
30 to 59 days | — | 2,038 | 3,073 | 5,111 | — | (188) | (370) | (558) | 10.9 |
60 to 89 days | — | 1,091 | 2,295 | 3,386 | — | (163) | (276) | (439) | 13.0 |
90 days and more | — | — | 14,166 | 14,166 | — | — | (3,469) | (3,469) | 24.5 |
Other personal lending | 156,365 | 9,477 | 7,883 | 173,725 | (675) | (1,215) | (1,362) | (3,252) | 1.9 |
Not past due | 154,384 | 7,124 | 2,100 | 163,608 | (655) | (873) | (157) | (1,685) | 1.0 |
Past due by: | |||||||||
less than 30 days | 1,981 | 1,552 | 876 | 4,409 | (20) | (149) | (55) | (224) | 5.1 |
30 to 59 days | — | 643 | 557 | 1,200 | — | (125) | (121) | (246) | 20.5 |
60 to 89 days | — | 158 | 113 | 271 | — | (68) | (9) | (77) | 28.4 |
90 days and more | — | — | 4,237 | 4,237 | — | — | (1,020) | (1,020) | 24.1 |
At 31 Dec 2023 | 2,062,416 | 101,088 | 50,716 | 2,214,220 | (7,719) | (8,433) | (7,602) | (23,754) | 1.1 |
First lien residential mortgages | 1,954,743 | 92,233 | 53,033 | 2,100,009 | (6,161) | (6,566) | (7,698) | (20,425) | 1.0 |
Not past due | 1,954,653 | 73,316 | 16,316 | 2,044,285 | (6,161) | (5,366) | (2,400) | (13,927) | 0.7 |
Past due by: | |||||||||
less than 30 days | 90 | 16,569 | 11,113 | 27,772 | — | (918) | (1,258) | (2,176) | 7.8 |
30 to 59 days | — | 1,819 | 4,439 | 6,258 | — | (137) | (480) | (617) | 9.9 |
60 to 89 days | — | 529 | 2,187 | 2,716 | — | (145) | (243) | (388) | 14.3 |
90 days and more | — | — | 18,978 | 18,978 | — | — | (3,317) | (3,317) | 17.5 |
Other personal lending | 158,198 | 17,908 | 10,119 | 186,225 | (510) | (2,150) | (1,625) | (4,285) | 2.3 |
Not past due | 156,572 | 14,512 | 3,133 | 174,217 | (494) | (1,703) | (307) | (2,504) | 1.4 |
Past due by: | |||||||||
less than 30 days | 1,626 | 2,801 | 1,187 | 5,614 | (16) | (285) | (81) | (382) | 6.8 |
30 to 59 days | — | 332 | 687 | 1,019 | — | (72) | (135) | (207) | 20.3 |
60 to 89 days | — | 263 | 246 | 509 | — | (90) | (24) | (114) | 22.4 |
90 days and more | — | — | 4,866 | 4,866 | — | — | (1,078) | (1,078) | 22.2 |
At 31 Dec 2022 | 2,112,941 | 110,141 | 63,152 | 2,286,234 | (6,671) | (8,716) | (9,323) | (24,710) | 1.1 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 115 |
Gross carrying amount | Allowance for ECL | ECL coverage | ||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | % | % | % | % | |
Not Collateralised | 282,377 | 5,600 | 8,396 | 296,373 | (2,419) | (320) | (2,254) | (4,993) | 0.9 | 5.7 | 26.8 | 1.7 |
Fully collateralised by LTV ratio | 498,384 | 42,039 | 36,116 | 576,539 | (4,006) | (4,023) | (6,394) | (14,423) | 0.8 | 9.6 | 17.7 | 2.5 |
– less than 50% | 223,638 | 36,527 | 14,850 | 275,015 | (3,747) | (2,662) | (3,312) | (9,721) | 1.7 | 7.3 | 22.3 | 3.5 |
– 51% to 75% | 86,648 | 3,719 | 18,417 | 108,784 | (180) | (1,218) | (2,450) | (3,848) | 0.2 | 32.8 | 13.3 | 3.5 |
– 76% to 90% | 21,840 | 1,670 | 2,800 | 26,310 | (30) | (139) | (632) | (801) | 0.1 | 8.3 | 22.6 | 3.0 |
– 91% to 100% | 166,258 | 123 | 49 | 166,430 | (49) | (4) | — | (53) | — | 3.3 | — | — |
Partially collateralised: LTV > 100% | 31,140 | 5,915 | 5,134 | 42,189 | (518) | (687) | (1,103) | (2,308) | 1.7 | 11.6 | 21.5 | 5.5 |
– of which: Collateral value | 12,948 | 3,906 | 2,501 | 19,355 | ||||||||
Total at 31 Dec 2023 | 811,901 | 53,554 | 49,646 | 915,101 | (6,943) | (5,030) | (9,751) | (21,724) | 0.9 | 9.4 | 19.6 | 2.4 |
Not Collateralised | 169,622 | 45,793 | 34,581 | 249,996 | (1,026) | (1,274) | (6,173) | (8,473) | 0.6 | 2.8 | 17.9 | 3.4 |
Fully collateralised by LTV ratio | 457,924 | 123,503 | 19,299 | 600,726 | (1,992) | (8,180) | (2,243) | (12,415) | 0.4 | 6.6 | 11.6 | 2.1 |
– less than 50% | 162217 | 115,287 | 18,102 | 295,606 | (1,608) | (7,854) | (2,049) | (11,511) | 1.0 | 6.8 | 11.3 | 3.9 |
– 51% to 75% | 29,657 | 6,521 | 1,188 | 37,366 | (284) | (308) | (185) | (777) | 1.0 | 4.7 | 15.6 | 2.1 |
– 76% to 90% | 2,106 | 1,480 | — | 3,586 | (8) | (10) | — | (18) | 0.4 | 0.7 | — | 0.5 |
– 91% to 100% | 263,944 | 215 | 9 | 264,168 | (92) | (8) | (9) | (109) | — | 3.7 | 100.0 | — |
Partially collateralised: LTV > 100% | 71,887 | 12,080 | 1,978 | 85,945 | (488) | (574) | (1,074) | (2,136) | 0.7 | 4.8 | 54.3 | 2.5 |
– of which: Collateral value | 13,460 | 3,441 | 678 | 17,579 | ||||||||
Total at 31 Dec 2022 | 699,433 | 181,376 | 55,858 | 936,667 | (3,506) | (10,028) | (9,490) | (23,024) | 0.5 | 5.5 | 17.0 | 2.5 |
Gross carrying amount | Allowance for ECL | ECL coverage | |
€000 | €000 | % | |
CRR 1 to 8 | |||
Not collateralised | 287,977 | (2,739) | 1.0 |
Fully collateralised | 540,423 | (8,029) | 1.5 |
– less than or equal to 50% | 260,165 | (6,409) | 2.5 |
– 51% to 75% | 90,367 | (1,398) | 1.5 |
– 76% to 90% | 23,510 | (169) | 0.7 |
– 91% to 100% | 166,381 | (53) | — |
Partially collateralised: LTV > 100% | 37,055 | (1,205) | 3.3 |
– of which: Collateral value | 16,854 | ||
Total | 865,455 | (11,973) | 1.4 |
CRR 9 to 10 | |||
Not collateralised | 8,396 | (2,254) | 26.8 |
Fully collateralised | 36,116 | (6,394) | 17.7 |
– less than or equal to 50% | 14,850 | (3,312) | 22.3 |
– 51% to 75% | 18,417 | (2,450) | 13.3 |
– 76% to 90% | 2,800 | (632) | 22.6 |
– 91% to 100% | 49 | — | — |
Partially collateralised: LTV > 100% | 5,134 | (1,103) | 21.5 |
– of which: Collateral value | 2,501 | ||
Total | 49,646 | (9,751) | 19.6 |
At 31 Dec 2023 | 915,101 | (21,724) | 2.4 |
116 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Gross carrying amount | Allowance for ECL | ECL coverage | |
€000 | €000 | % | |
CRR 1 to 8 | |||
Not collateralised | 215,415 | (2,300) | 1.1 |
Fully collateralised | 581,427 | (10,172) | 1.7 |
– less than or equal to 50% | 277,504 | (9,462) | 3.4 |
– 51% to 75% | 36,178 | (592) | 1.6 |
– 76% to 90% | 3,586 | (18) | 0.5 |
– 91% to 100% | 264,159 | (100) | — |
Partially collateralised: LTV > 100% | 83,967 | (1,062) | 1.3 |
– of which: Collateral value | 16,901 | ||
Total | 880,809 | (13,534) | 1.5 |
CRR 9 to 10 | |||
Not collateralised | 34,581 | (6,173) | 17.9 |
Fully collateralised | 19,299 | (2,243) | 11.6 |
– less than or equal to 50% | 18,102 | (2,049) | 11.3 |
– 51% to 75% | 1,188 | (185) | 15.6 |
– 76% to 90% | — | — | — |
– 91% to 100% | 9 | (9) | 100.0 |
Partially collateralised: LTV > 100% | 1,978 | (1,074) | 54.3 |
– of which: Collateral value | 678 | ||
Total | 55,858 | (9,490) | 17.0 |
At 31 Dec 2022 | 936,667 | (23,024) | 2.5 |
Gross carrying/nominal amount | Allowance for ECL | ECL coverage | ||||||||||
Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | Stage 1 | Stage 2 | Stage 3 | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | % | % | % | % | |
Not Collateralised | 73,880 | 2,486 | 707 | 77,073 | (405) | (875) | (412) | (1,692) | 0.5 | 35.2 | 58.3 | 2.2 |
Fully collateralised by LTV ratio | 1,984,890 | 98,574 | 49,978 | 2,133,442 | (7,307) | (7,551) | (7,175) | (22,033) | 0.4 | 7.7 | 14.4 | 1.0 |
– less than 50% | 964,268 | 68,577 | 39,400 | 1,072,245 | (3,261) | (3,666) | (4,526) | (11,453) | 0.3 | 5.3 | 11.5 | 1.1 |
– 51% to 75% | 828,702 | 27,505 | 8,853 | 865,060 | (3,293) | (3,337) | (2,145) | (8,775) | 0.4 | 12.1 | 24.2 | 1.0 |
– 76% to 90% | 189,953 | 2,457 | 1,195 | 193,605 | (750) | (536) | (291) | (1,578) | 0.4 | 21.8 | 24.4 | 0.8 |
– 91% to 100% | 1,967 | 35 | 530 | 2,532 | (3) | (12) | (213) | (227) | 0.2 | 34.3 | 40.2 | 9.0 |
Partially collateralised: LTV > 100% | 3,646 | 28 | 31 | 3,705 | (7) | (7) | (15) | (29) | 0.2 | 25.0 | 48.4 | 0.8 |
– of which: Collateral value | 762 | 3 | 11 | 776 | ||||||||
Total at 31 Dec 2023 | 2,062,416 | 101,088 | 50,716 | 2,214,220 | (7,719) | (8,433) | (7,602) | (23,754) | 0.4 | 8.3 | 15.0 | 1.1 |
Not Collateralised | 72,884 | 8,379 | 1,005 | 82,268 | (296) | (1,762) | (646) | (2,704) | 0.4 | 21.0 | 64.3 | 3.3 |
Fully collateralised by LTV ratio | 2,036,266 | 101,395 | 62,123 | 2,199,784 | (6,370) | (6,932) | (8,661) | (21,963) | 0.3 | 6.8 | 13.9 | 1.0 |
– less than 50% | 910,869 | 66,286 | 48,290 | 1,025,445 | (2,674) | (2,937) | (4,795) | (10,406) | 0.3 | 4.4 | 9.9 | 1.0 |
– 51% to 75% | 852,590 | 30,812 | 11,507 | 894,909 | (2,773) | (3,491) | (3,143) | (9,407) | 0.3 | 11.3 | 27.3 | 1.1 |
– 76% to 90% | 271,060 | 3,919 | 1,932 | 276,911 | (921) | (480) | (518) | (1,919) | 0.3 | 12.2 | 26.8 | 0.7 |
– 91% to 100% | 1,747 | 378 | 394 | 2,519 | (2) | (24) | (205) | (231) | 0.1 | 6.3 | 52.0 | 9.2 |
Partially collateralised: LTV > 100% | 3,791 | 367 | 24 | 4,182 | (5) | (22) | (16) | (43) | 0.1 | 6.0 | 66.7 | 1.0 |
– of which: Collateral value | 969 | 137 | 4 | 1,110 | ||||||||
Total at 31 Dec 2022 | 2,112,941 | 110,141 | 63,152 | 2,286,234 | (6,671) | (8,716) | (9,323) | (24,710) | 0.3 | 7.9 | 14.8 | 1.1 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 117 |
Gross carrying amount | Allowance for ECL | ECL coverage | |
€000 | €000 | % | |
Less than 30 days past due | |||
Not collateralised | 75,976 | (1,175) | 1.5 |
Fully collateralised | 2,106,171 | (16,743) | 0.8 |
– less than or equal to 50% | 1,051,384 | (7,950) | 0.8 |
– 51% to 75% | 860,301 | (7,455) | 0.9 |
– 76% to 90% | 192,496 | (1,324) | 0.7 |
– 91% to 100% | 1,990 | (14) | 0.7 |
Partially collateralised: LTV > 100% | 3,702 | (27) | 0.7 |
– of which: Collateral value | 773 | ||
Total | 2,185,849 | (17,945) | 0.8 |
30 days to 89 days past due | |||
Not collateralised | 556 | (192) | 34.5 |
Fully collateralised | 9,412 | (1,128) | 12.0 |
– less than or equal to 50% | 7,338 | (620) | 8.4 |
– 51% to 75% | 1,370 | (275) | 20.1 |
– 76% to 90% | 320 | (64) | 20.0 |
– 91% to 100% | 384 | (169) | 44.0 |
Partially collateralised: LTV > 100% | — | — | — |
– of which: Collateral value | — | ||
Total | 9,968 | (1,320) | 13.2 |
90 days past due or more | |||
Not collateralised | 541 | (325) | 60.1 |
Fully collateralised | 17,859 | (4,162) | 23.3 |
– less than or equal to 50% | 13,524 | (2,883) | 21.3 |
– 51% to 75% | 3,388 | (1,045) | 30.8 |
– 76% to 90% | 790 | (189) | 23.9 |
– 91% to 100% | 157 | (45) | 28.7 |
Partially collateralised: LTV > 100% | 3 | (2) | 66.7 |
– of which: Collateral value | 3 | ||
Total | 18,403 | (4,489) | 24.4 |
At 31 Dec 2023 | 2,214,220 | (23,754) | 1.1 |
Less than 30 days past due | |||
Not collateralised | 81,096 | (2,095) | 2.6 |
Fully collateralised | 2,166,637 | (16,869) | 0.8 |
– less than or equal to 50% | 999,672 | (7,418) | 0.7 |
– 51% to 75% | 888,503 | (7,606) | 0.9 |
– 76% to 90% | 276,138 | (1,727) | 0.6 |
– 91% to 100% | 2,324 | (118) | 5.1 |
Partially collateralised: LTV > 100% | 4,155 | (25) | 0.6 |
– of which: Collateral value | 1,106 | ||
Total | 2,251,888 | (18,989) | 0.8 |
30 days to 89 days past due | |||
Not collateralised | 506 | (178) | 35.2 |
Fully collateralised | 9,977 | (1,136) | 11.4 |
– less than or equal to 50% | 7,739 | (716) | 9.3 |
– 51% to 75% | 1,902 | (339) | 17.8 |
– 76% to 90% | 336 | (81) | 24.1 |
– 91% to 100% | — | — | — |
Partially collateralised: LTV > 100% | 19 | (12) | 63.2 |
– of which: Collateral value | 2 | ||
Total | 10,502 | (1,326) | 12.6 |
90 days past due or more | |||
Not collateralised | 666 | (431) | 64.7 |
Fully collateralised | 23,170 | (3,958) | 17.1 |
– less than or equal to 50% | 18,034 | (2,272) | 12.6 |
– 51% to 75% | 4,504 | (1,462) | 32.5 |
– 76% to 90% | 437 | (111) | 25.4 |
– 91% to 100% | 195 | (113) | 57.9 |
Partially collateralised: LTV > 100% | 8 | (6) | 75.0 |
– of which: Collateral value | 2 | ||
Total | 23,844 | (4,395) | 18.4 |
At 31 Dec 2022 | 2,286,234 | (24,710) | 1.1 |
118 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 119 |
Consensus scenarios | Downside 2 scenario | ||||
Central | Upside | Downside | |||
2023: Annual average growth rate (%) | 4.3 | 4.3 | 4.3 | 4.3 | |
2024: Annual average growth rate (%) | 3.6 | 4.5 | 2.6 | (2.1) | |
2025: Annual average growth rate (%) | 3.8 | 5.0 | 2.5 | (0.6) | |
2026: Annual average growth rate (%) | 3.6 | 4.3 | 2.9 | 5.6 | |
2027: Annual average growth rate (%) | 3.7 | 3.6 | 3.6 | 5.5 | |
Five year average growth rate (%) | 3.7 | 4.2 | 3.1 | 2.6 | |
Consensus scenarios | Downside 2 scenario | |||
Central | Upside | Downside | ||
2022: Annual average growth rate (%) | 5.0 | 5.0 | 5.0 | 5.0 |
2023: Annual average growth rate (%) | 3.2 | 4.5 | 1.7 | (2.2) |
2024: Annual average growth rate (%) | 3.1 | 4.7 | 1.5 | (1.7) |
2025: Annual average growth rate (%) | 2.8 | 3.7 | 2.1 | 4.6 |
2026: Annual average growth rate (%) | 2.8 | 2.8 | 2.8 | 4.8 |
Five year average growth rate (%) | 2.9 | 3.7 | 2.2 | 1.7 |
Consensus scenarios | Downside 2 scenario | ||||
Central | Upside | Downside | |||
2023: Annual average rate (%) | 2.6 | 2.6 | 2.6 | 2.6 | |
2024: Annual average rate (%) | 2.9 | 2.6 | 3.3 | 3.4 | |
2025: Annual average rate (%) | 3.0 | 2.7 | 3.4 | 3.9 | |
2026: Annual average rate (%) | 3.0 | 2.9 | 3.1 | 3.7 | |
2027: Annual average rate (%) | 2.9 | 2.9 | 2.9 | 3.3 | |
Five year average rate (%) | 2.9 | 2.8 | 3.2 | 3.5 | |
120 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Consensus scenarios | Downside 2 scenario | |||
Central | Upside | Downside | ||
2022: Annual average rate (%) | 3.3 | 3.3 | 3.3 | 3.3 |
2023: Annual average rate (%) | 3.5 | 2.2 | 4.7 | 4.7 |
2024: Annual average rate (%) | 3.5 | 2.2 | 4.9 | 5.1 |
2025: Annual average rate (%) | 3.6 | 3.0 | 4.1 | 4.8 |
2026: Annual average rate (%) | 3.5 | 3.5 | 3.5 | 4.2 |
Five year average rate (%) | 3.5 | 2.9 | 4.2 | 4.6 |
Consensus scenarios | Downside 2 scenario | ||||
Central | Upside | Downside | |||
2023: Annual average growth rate (%) | 5.6 | 5.6 | 5.6 | 5.6 | |
2024: Annual average growth rate (%) | 2.9 | 2.7 | 3.1 | 5.1 | |
2025: Annual average growth rate (%) | 1.8 | 1.4 | 2.0 | (0.3) | |
2026: Annual average growth rate (%) | 1.9 | 2.2 | 1.5 | 0.3 | |
2027: Annual average growth rate (%) | 2.1 | 2.4 | 1.8 | 1.2 | |
Five year average growth rate (%) | 2.2 | 2.2 | 2.1 | 1.6 | |
Consensus scenarios | Downside 2 scenario | |||
Central | Upside | Downside | ||
2022: Annual average % change | 5.9 | 5.9 | 5.9 | 5.9 |
2023: Annual average % change | 3.2 | 2.5 | 4.6 | 7.2 |
2024: Annual average % change | 1.9 | 1.4 | 1.9 | (1.4) |
2025: Annual average % change | 1.9 | 2.1 | 0.8 | 0.3 |
2026: Annual average % change | 2.0 | 2.0 | 2.0 | 1.3 |
Five year average % change | 2.2 | 2.0 | 2.2 | 1.8 |
Consensus scenarios | Downside 2 scenario | ||||
Central | Upside | Downside | |||
2023: Annual average growth rate (%) | 6.2 | 6.2 | 6.2 | 6.2 | |
2024: Annual average growth rate (%) | 5.6 | 6.8 | 3.9 | 0.2 | |
2025: Annual average growth rate (%) | 9.4 | 10.6 | 8.0 | (4.1) | |
2026: Annual average growth rate (%) | 4.2 | 4.6 | 3.8 | (10.2) | |
2027: Annual average growth rate (%) | 5.1 | 5.1 | 5.1 | (0.8) | |
Five year average growth rate (%) | 5.8 | 6.4 | 5.1 | (2.5) | |
Consensus scenarios | Downside 2 scenario | |||
Central | Upside | Downside | ||
2022: Annual average % change | 5.9 | 5.9 | 5.9 | 5.9 |
2023: Annual average % change | 7.0 | 8.3 | 5.4 | 3.5 |
2024: Annual average % change | 6.7 | 8.3 | 5.0 | (10.7) |
2025: Annual average % change | 3.9 | 4.7 | 3.1 | (13.0) |
2026: Annual average % change | 3.9 | 3.9 | 3.9 | (3.1) |
Five year average % change | 5.2 | 6.0 | 4.4 | (3.8) |
Consensus scenarios | Downside 2 scenario | ||||
Central | Upside | Downside | |||
2023: Annual average rate (%) | 3.5 | 3.5 | 3.5 | 3.5 | |
2024: Annual average rate (%) | 3.7 | 3.1 | 3.6 | 4.5 | |
2025: Annual average rate (%) | 2.8 | 2.8 | 1.5 | 1.9 | |
2026: Annual average rate (%) | 2.7 | 2.7 | 1.5 | 1.6 | |
2027: Annual average rate (%) | 2.7 | 2.7 | 2.5 | 1.8 | |
Five year average rate (%) | 3.0 | 2.8 | 2.4 | 2.3 | |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 121 |
Consensus scenarios | Downside 2 scenario | |||
Central | Upside | Downside | ||
2022: Annual average rate (%) | 0.4 | 0.4 | 0.4 | 0.4 |
2023: Annual average rate (%) | 2.8 | 2.5 | 3.0 | 4.8 |
2024: Annual average rate (%) | 2.7 | 2.4 | 1.5 | 2.1 |
2025: Annual average rate (%) | 2.3 | 2.3 | 0.6 | 0.7 |
2026: Annual average rate (%) | 2.3 | 2.3 | 0.9 | 0.6 |
Five year average rate (%) | 2.5 | 2.4 | 1.5 | 1.8 |
Consensus Scenarios | Downside 2 scenario | |||
Central | Upside | Downside | ||
Probability (%) – 31 Dec 2023 | 75 | 10 | 10 | 5 |
Probability (%) – 31 Dec 2022 | 60 | 5 | 25 | 10 |
122 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Weighted average ECL | Consensus scenarios | Downside 2 scenario | |||
Central | Upside | Downside | |||
€000 | €000 | €000 | €000 | €000 | |
Wholesale lending | 12,843 | 12,402 | 11,111 | 14,718 | 19,167 |
Personal lending | 26,629 | 26,436 | 25,983 | 27,307 | 33,493 |
Weighted average ECL | Consensus scenarios | Downside 2 scenario | |||
Central | Upside | Downside | |||
€000 | €000 | €000 | €000 | €000 | |
Wholesale lending | 14,343 | 12,108 | 10,003 | 15,419 | 25,997 |
Personal lending | 27,901 | 22,321 | 21,664 | 23,187 | 29,987 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 123 |
Weighted average | |
€000 | |
Unemployment 80% : Real GDP growth rate 20% | 24,646 |
Unemployment 100% : Real GDP growth rate 0% | 25,194 |
Unemployment 0% : Real GDP growth rate 100% | 25,670 |
Treasury Bills | Debt securities | Total | |
€000 | €000 | €000 | |
– measured at fair value through other comprehensive income | 385,580 | 456,930 | 842,510 |
AAA | 39,574 | 38,335 | 77,909 |
AA- to AA+ | 233,557 | 41,818 | 275,375 |
A- | 112,449 | 376,777 | 489,226 |
– measured at amortised cost | — | 858,886 | 858,886 |
AAA | — | 446,725 | 446,725 |
AA- to AA+ | — | 341,768 | 341,768 |
A- | — | 70,393 | 70,393 |
At 31 Dec 2023 | 385,580 | 1,315,816 | 1,701,396 |
– measured at fair value through other comprehensive income | 242,292 | 637,709 | 880,001 |
AAA | — | 101,233 | 101,233 |
AA- to AA+ | — | 70,818 | 70,818 |
A- | 242,292 | 465,658 | 707,950 |
– measured at amortised cost | 42,202 | 367,024 | 409,226 |
AAA | — | 227,655 | 227,655 |
AA- to AA+ | — | 118,910 | 118,910 |
A- | 42,202 | 20,459 | 62,661 |
At 31 Dec 2022 | 284,494 | 1,004,733 | 1,289,227 |
124 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 125 |
Bank | |||||||
At 31 Dec 2023 | |||||||
Not more than 3 months | Between 3 and 6 months | Between 6 months and 1 year | Between 1 year and 5 years | More than 5 years | No maturity date | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | |
Assets | |||||||
Cash | 33,582 | — | — | — | — | — | 33,582 |
Balances with Central Bank of Malta and Treasury Bills | 1,291,702 | 160,941 | 132,687 | — | — | 57,727 | 1,643,057 |
Items in the course of collection from other banks | 8,427 | — | — | — | — | — | 8,427 |
Derivatives | 798 | 632 | 997 | 9,576 | 1,574 | — | 13,577 |
Loans and advances to banks | 614,640 | — | 1,500 | 100,000 | — | — | 716,140 |
Loans and advances to customers | 290,047 | 12,695 | 46,303 | 310,550 | 2,424,248 | — | 3,083,843 |
Financial investments | 15,824 | 18,076 | 97,082 | 1,184,784 | 50 | 41 | 1,315,857 |
Other assets | 26,796 | — | — | — | — | 1,760 | 28,556 |
Total assets | 2,281,816 | 192,344 | 278,569 | 1,604,910 | 2,425,872 | 59,528 | 6,843,039 |
Liabilities | |||||||
Deposits by banks | 5,117 | — | — | — | — | — | 5,117 |
Customer accounts | 5,733,149 | 168,836 | 222,687 | 47,597 | — | — | 6,172,269 |
Items in course of transmission to other banks | 18,359 | — | — | — | — | — | 18,359 |
Derivatives | 737 | 564 | 929 | 1,960 | 1,558 | — | 5,748 |
Borrowings from a group undertaking | — | — | — | 30,000 | 60,000 | — | 90,000 |
Subordinated liabilities | — | — | — | — | 65,000 | — | 65,000 |
Other liabilities | 7,780 | 948 | 2,375 | 1,295 | 845 | — | 13,243 |
Total liabilities | 5,765,142 | 170,348 | 225,991 | 80,852 | 127,403 | — | 6,369,736 |
Liquidity gap | (3,483,326) | 21,996 | 52,578 | 1,524,058 | 2,298,469 | ||
Cumulative liquidity gap | (3,483,326) | (3,461,330) | (3,408,752) | (1,884,694) | 413,775 | ||
At 31 Dec 2022 | |||||||
Assets | |||||||
Cash | 29,500 | — | — | — | — | — | 29,500 |
Balances with Central Bank of Malta and Treasury Bills | 1,452,279 | 22,765 | 19,437 | — | — | 59,367 | 1,553,848 |
Items in the course of collection from other banks | 6,921 | — | — | — | — | — | 6,921 |
Derivatives | 982 | 920 | 1,232 | 20,162 | 2,449 | — | 25,745 |
Loans and advances to banks | 548,524 | 10,564 | 67,129 | 100,000 | — | — | 726,217 |
Loans and advances to customers | 283,203 | 7,479 | 25,984 | 359,203 | 2,499,298 | — | 3,175,167 |
Financial investments | 9,226 | 78,980 | 129,492 | 761,219 | 25,816 | 35 | 1,004,768 |
Other assets | 26,140 | — | — | — | — | 1,513 | 27,653 |
Total assets | 2,356,775 | 120,708 | 243,274 | 1,240,584 | 2,527,563 | 60,915 | 6,549,819 |
Liabilities | |||||||
Deposits by banks | 2,861 | — | — | — | — | — | 2,861 |
Customer accounts | 5,580,808 | 131,912 | 242,138 | 55,534 | — | — | 6,010,392 |
Items in course of transmission to other banks | 27,397 | — | — | — | — | — | 27,397 |
Derivatives | 925 | 865 | 1,164 | 4,854 | 2,444 | — | 10,252 |
Borrowings from a group undertaking | — | — | — | — | 60,000 | — | 60,000 |
Subordinated liabilities | — | — | — | — | 62,000 | — | 62,000 |
Other liabilities | 6,908 | 355 | 1,171 | 1,291 | 920 | — | 10,645 |
Total liabilities | 5,618,899 | 133,132 | 244,473 | 61,679 | 125,364 | — | 6,183,547 |
Liquidity gap | (3,262,124) | (12,424) | (1,199) | 1,178,905 | 2,402,199 | ||
Cumulative liquidity gap | (3,262,124) | (3,274,548) | (3,275,747) | (2,096,842) | 305,357 | ||
126 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Bank | ||||||
At 31 Dec 2023 | ||||||
Due within 3 months €000 | Due between 3 and 12 months €000 | Due between 1 and 5 years €000 | Due after 5 years €000 | Gross nominal outflow €000 | Carrying amount €000 | |
Financial liabilities | ||||||
Deposits by banks | 5,117 | — | — | — | 5,117 | 5,117 |
Customer accounts | 5,736,402 | 395,918 | 48,232 | — | 6,180,552 | 6,172,269 |
Borrowings from a group undertaking | 1,157 | 3,471 | 44,203 | 69,184 | 118,015 | 90,000 |
Subordinated liabilities | 1,028 | 3,085 | 81,453 | 20,566 | 106,132 | 65,000 |
Other liabilities | 7,780 | 3,323 | 1,295 | 845 | 13,243 | 13,243 |
5,751,484 | 405,797 | 175,183 | 90,595 | 6,423,059 | 6,345,629 | |
Commitments and contingent liabilities | 1,039,104 | — | — | — | 1,039,104 | 1,039,104 |
At 31 Dec 2022 | ||||||
Financial liabilities | ||||||
Deposits by banks | 2,861 | — | — | — | 2,861 | 2,861 |
Customer accounts | 5,581,337 | 374,463 | 57,345 | — | 6,013,145 | 6,010,392 |
Borrowings from a group undertaking | 488 | 1,463 | 7,802 | 67,802 | 77,555 | 60,000 |
Subordinated liabilities | 637 | 1,912 | 10,198 | 64,549 | 77,296 | 62,000 |
Other liabilities | 6,908 | 1,526 | 1,291 | 920 | 10,645 | 10,645 |
5,592,231 | 379,364 | 76,636 | 133,271 | 6,181,502 | 6,145,898 | |
Commitments and contingent liabilities | 1,024,570 | — | — | — | 1,024,570 | 1,024,570 |
Bank | |||||
At 31 Dec 2023 | |||||
Less than 3 months | Between 3 months and 1 year | Between 1 year and 5 years | Over 5 years | Total | |
€000 | €000 | €000 | €000 | €000 | |
Inflows | 86,327 | 166,299 | 92,994 | 25 | 345,645 |
Outflows | (84,490) | (161,496) | (79,842) | (25) | (325,853) |
1,837 | 4,803 | 13,152 | — | 19,792 | |
At 31 Dec 2022 | |||||
Inflows | 70,051 | 142,061 | 117,931 | 128 | 330,171 |
Outflows | (69,828) | (140,854) | (113,337) | (128) | (324,147) |
223 | 1,207 | 4,594 | — | 6,024 | |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 127 |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Total assets at 31 Dec | 7,660,919 | 7,336,646 | 6,986,350 | 6,689,880 |
Less: | ||||
Debt securities pledged in terms of the Depositor Compensation Scheme | 13,262 | 11,105 | 13,262 | 11,105 |
Less: | ||||
Cash pledged in terms of the Recovery and Resolution Regulations | 1,760 | 1,513 | 1,760 | 1,513 |
Less: | ||||
Other assets that cannot be pledged as collateral | 838,432 | 901,774 | 172,199 | 182,188 |
Assets available to support funding and collateral needs at 31 Dec | 6,807,465 | 6,422,254 | 6,799,129 | 6,495,074 |
128 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
2023 | 2022 | |
€000 | €000 | |
At 31 Dec | 1,453 | 1,215 |
Average | 1,873 | 978 |
Minimum | 1,002 | 649 |
Maximum | 2,576 | 1,827 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 129 |
Bank | ||
Impact on future one year net income | Impact on future one year net income | |
2023 | 2022 | |
€000 | €000 | |
+ 100 basis points | 26,077 | 32,596 |
- 100 basis points | (24,499) | (35,621) |
Bank | ||
Impact on reserves | Impact on reserves | |
2023 | 2022 | |
€000 | €000 | |
+100 basis point parallel move in all yield curves | (2,404) | (2,990) |
As a percentage of total shareholders’ equity (%) | (0.46) | (0.65) |
130 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Bank | ||||||
At 31 Dec 2023 | ||||||
Not more than 3 months €000 | Between 3 and 6 months €000 | Between 6 months and 1 year €000 | Between 1 year and 5 years €000 | More than 5 years €000 | Total €000 | |
Balances with Central bank of Malta and Treasury Bills | 1,291,702 | 160,941 | 132,687 | — | — | 1,585,330 |
Loans and advances to banks | 614,640 | — | 1,500 | 100,000 | — | 716,140 |
Loans and advances to customers | 2,814,661 | — | — | 269,182 | — | 3,083,843 |
Financial investments | 363,754 | 505,161 | 446,901 | — | — | 1,315,816 |
Total assets | 5,084,757 | 666,102 | 581,088 | 369,182 | — | 6,701,129 |
Deposits by banks | 5,117 | — | — | — | — | 5,117 |
Customer accounts | 5,733,149 | 168,836 | 222,687 | 47,597 | — | 6,172,269 |
Borrowings from a group undertaking | 90,000 | — | — | — | — | 90,000 |
Subordinated liabilities | 65,000 | — | — | — | — | 65,000 |
Total liabilities | 5,893,266 | 168,836 | 222,687 | 47,597 | — | 6,332,386 |
Interest rate sensitivity gap | (808,509) | 497,266 | 358,401 | 321,585 | — | |
Cumulative interest rate sensitivity gap | (808,509) | (311,243) | 47,158 | 368,743 | 368,743 | |
At 31 Dec 2022 | ||||||
Assets | ||||||
Balances with Central bank of Malta and Treasury Bills | 1,452,279 | 22,765 | 19,437 | — | — | 1,494,481 |
Loans and advances to banks | 698,525 | 10,564 | 17,128 | — | — | 726,217 |
Loans and advances to customers | 2,795,616 | 48,961 | 103,703 | 226,887 | — | 3,175,167 |
Financial Investments | 14,196 | 78,980 | 125,478 | 760,263 | 25,816 | 1,004,733 |
Total assets | 4,960,616 | 161,270 | 265,746 | 987,150 | 25,816 | 6,400,598 |
Deposits by banks | 2,861 | — | — | — | — | 2,861 |
Customer accounts | 5,580,808 | 131,912 | 242,138 | 55,534 | — | 6,010,392 |
Borrowings from a group undertaking | 60,000 | — | — | — | — | 60,000 |
Subordinated liabilities | 62,000 | — | — | — | — | 62,000 |
Total liabilities | 5,705,669 | 131,912 | 242,138 | 55,534 | — | 6,135,253 |
Interest rate sensitivity gap | (745,053) | 29,358 | 23,608 | 931,616 | 25,816 | |
Cumulative interest rate sensitivity gap | (745,053) | (715,695) | (692,087) | 239,529 | 265,345 | |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 131 |
Bank | |||||
2023 | |||||
Reporting currency | In USD | In GBP | Other currencies | Total | |
€000 | €000 | €000 | €000 | €000 | |
Assets | |||||
Balances with Central Bank of Malta, Treasury Bills and cash | 1,675,387 | 508 | 439 | 305 | 1,676,639 |
Items in the course of collection from other banks | 8,419 | 6 | 2 | — | 8,427 |
Derivatives | 10,032 | 3,488 | 7 | 50 | 13,577 |
Loans and advances to banks | 206,554 | 386,233 | 97,621 | 25,732 | 716,140 |
Loans and advances to customers | 3,050,753 | 32,768 | 322 | — | 3,083,843 |
Financial investments | 1,298,146 | 5,706 | 10,772 | 1,233 | 1,315,857 |
Other assets | 27,996 | 470 | 69 | 21 | 28,556 |
Total assets | 6,277,287 | 429,179 | 109,232 | 27,341 | 6,843,039 |
Liabilities | |||||
Deposits by banks | 5,066 | — | — | 51 | 5,117 |
Customer accounts | 5,611,988 | 424,656 | 108,763 | 26,862 | 6,172,269 |
Items in the course of transmission to other banks | 18,359 | — | — | — | 18,359 |
Derivatives | 2,539 | 3,160 | 3 | 46 | 5,748 |
Borrowings from a group undertaking | 90,000 | — | — | — | 90,000 |
Subordinated liabilities | 65,000 | — | — | — | 65,000 |
Other liabilities | 11,260 | 1,089 | 885 | 9 | 13,243 |
Total liabilities | 5,804,212 | 428,905 | 109,651 | 26,968 | 6,369,736 |
Net open position | 473,075 | 274 | (419) | 373 | |
2022 | |||||
Assets | |||||
Balances with Central Bank of Malta, Treasury Bills and cash | 1,581,906 | 545 | 455 | 442 | 1,583,348 |
Items in the course of collection from other banks | 6,902 | 5 | 14 | — | 6,921 |
Derivatives | 19,493 | 6,252 | — | — | 25,745 |
Loans and advances to banks | 241,726 | 302,840 | 107,469 | 74,182 | 726,217 |
Loans and advances to customers | 3,136,510 | 38,528 | 129 | — | 3,175,167 |
Financial investments | 958,302 | 17,455 | 21,156 | 7,855 | 1,004,768 |
Other assets | 24,930 | 2,578 | 68 | 77 | 27,653 |
Total assets | 5,969,769 | 368,203 | 129,291 | 82,556 | 6,549,819 |
Liabilities | |||||
Deposits by banks | 2,392 | — | — | 469 | 2,861 |
Customer accounts | 5,438,715 | 355,354 | 129,790 | 86,533 | 6,010,392 |
Items in the course of transmission to other banks | 27,397 | — | — | — | 27,397 |
Derivatives | 4,382 | 5,870 | — | — | 10,252 |
Borrowings from a group undertaking | 60,000 | — | — | — | 60,000 |
Subordinated liabilities | 62,000 | — | — | — | 62,000 |
Other liabilities | 7,913 | 2,075 | 647 | 10 | 10,645 |
Total liabilities | 5,602,799 | 363,299 | 130,437 | 87,012 | 6,183,547 |
Net open position | 366,970 | 4,904 | (1,146) | (4,456) | |
132 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
2023 | |||
Effect on profit after tax | Effect on CSM | Effect on total equity | |
€000 | €000 | €000 | |
+100 basis points shift in yield curves | |||
– Insurance and Reinsurance Contracts | 3,003 | (411) | 3,003 |
– Financial Instruments | (2,984) | — | (2,984) |
-100 basis points shift in yield curves | |||
– Insurance and Reinsurance Contracts | (4,610) | 446 | (4,610) |
– Financial Instruments | 3,348 | — | 3,348 |
10% increase in equity prices | |||
– Insurance and Reinsurance Contracts | 356 | 646 | 356 |
10% decrease in equity prices | |||
– Insurance and Reinsurance Contracts | (694) | (127) | (694) |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 133 |
2022 | |||
Effect on CSM | |||
€000 | €000 | €000 | |
+100 basis points shift in yield curves | |||
– Insurance and Reinsurance Contracts | 3,271 | (216) | 3,271 |
– Financial Instruments | (2,359) | — | (2,359) |
-100 basis points shift in yield curves | |||
– Insurance and Reinsurance Contracts | (4,404) | 256 | (4,404) |
– Financial Instruments | 2,601 | — | 2,601 |
10% increase in equity prices | |||
– Insurance and Reinsurance Contracts | 408 | 361 | 408 |
10% decrease in equity prices | |||
– Insurance and Reinsurance Contracts | (407) | (363) | (407) |
Debt securities – Unit linked | Debt securities – Others | Total | ||||
2023 | 2022 | 2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | €000 | €000 | |
AAA | — | — | 1,884 | 5,633 | 1,884 | 5,633 |
AA+ to AA- | — | — | 34,705 | 30,791 | 34,705 | 30,791 |
A+ to A- | — | 457 | 138,101 | 131,237 | 138,101 | 131,694 |
BBB+ to BBB- | — | 734 | 43,595 | 44,433 | 43,595 | 45,167 |
BB+ to B- | — | 240 | — | — | — | 240 |
Unrated | — | 1,841 | 14,079 | 15,699 | 14,079 | 17,540 |
Total | — | 3,272 | 232,364 | 227,793 | 232,364 | 231,065 |
134 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
At 31 Dec 2023 | ||||||||
No fixed maturity | less than 1 year | 1 -2 years | 2 -3 years | 3 - 4 years | 4 - 5 years | Due after 5 years | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |
Financial assets mandatorily measured at fair value through profit or loss | 460,660 | 29.353 | 12,531 | 18,302 | 19,515 | 15.957 | 136,706 | 693,024 |
Reinsurance contract assets | 2,557 | — | — | — | — | — | — | 2,557 |
Cash | 4,443 | — | — | — | — | — | — | 4,443 |
467,660 | 29.353 | 12,531 | 18,302 | 19,515 | 15.957 | 136,706 | 700,024 | |
At 31 Dec 2022 | ||||||||
Financial assets mandatorily measured at fair value through profit or loss | 429,354 | 18.604 | 35,469 | 18,420 | 21,697 | 27,547 | 109,355 | 660,446 |
Reinsurance contract assets | 2,959 | — | — | — | — | — | — | 2,959 |
Cash | 6,290 | — | — | — | — | — | — | 6,290 |
438,603 | 18.604 | 35,469 | 18,420 | 21,697 | 27,547 | 109,355 | 669,695 | |
At 31 Dec 2023 | ||||||||
On demand | less than 1 year | 1 -2 years | 2 -3 years | 3 - 4 years | 4 - 5 years | Due after 5 years | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |
Liabilities to customers: | ||||||||
3,760 | 7,459 | 3,104 | 4,141 | 27,874 | 22,425 | 383,085 | 451,848 | |
Life contracts other | — | (3,552) | (6,562) | (5,975) | (5,536) | (5,006) | 19,312 | (7,319) |
Reinsurance liabilities | — | 170 | 1,402 | 1,448 | 1,397 | 1,376 | 22,384 | 28,177 |
Investment contracts | 98,433 | 5,057 | 5,011 | 4,693 | 4,531 | 6,166 | 30,809 | 154,700 |
102,193 | 9,134 | 2,955 | 4,307 | 28,266 | 24,961 | 455,590 | 627,406 | |
At 31 Dec 2022 | ||||||||
Liabilities to customers: | ||||||||
Life direct participating and investment DPF contracts | — | 539 | 6,682 | 1,317 | 2,963 | 27,893 | 396,828 | 436,222 |
Life contracts other | — | (4,095) | (6,076) | (5,325) | (4,804) | (4,499) | 19,340 | (5,459) |
Reinsurance liabilities | — | 827 | 780 | 811 | 817 | 786 | 11,934 | 15,955 |
Investment contracts | 104,754 | 948 | 3,105 | 3,142 | 3,207 | 3,284 | 43,683 | 162,123 |
104,754 | (1,781) | 4,491 | (55) | 2,183 | 27,464 | 471,785 | 608,841 | |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 135 |
Effect on CSM (gross)1 | Effect on profit after tax (gross)1 | Effect on profit after tax (net)2 | Effect on total equity (gross)1 | Effect on total equity (net)2 | |
At 31 Dec 2023 | €000 | €000 | €000 | €000 | €000 |
10% increase in mortality and/or morbidity rates | (6,922) | 179 | (105) | 179 | (105) |
10% decrease in mortality and/or morbidity rates | 7,032 | (196) | 108 | (196) | 108 |
10% increase in lapse rates | (64) | (527) | (597) | (527) | (597) |
10% decrease in lapse rates | 309 | 397 | 479 | 397 | 479 |
10% increase in expense rates | (1,714) | (252) | (253) | (252) | (253) |
10% decrease in expense rates | 1,708 | 255 | 255 | 255 | 255 |
At 31 Dec 2022 | €000 | €000 | €000 | €000 | €000 |
10% increase in mortality and/or morbidity rates | (7,166) | 88 | (110) | 88 | (110) |
10% decrease in mortality and/or morbidity rates | 7,274 | (97) | 111 | (97) | 111 |
10% increase in lapse rates | 554 | (636) | (664) | (636) | (664) |
10% decrease in lapse rates | (653) | 684 | 715 | 684 | 715 |
10% increase in expense rates | (1,452) | (248) | (248) | (248) | (248) |
10% decrease in expense rates | 1,451 | 249 | 249 | 249 | 249 |
136 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 137 |
Group | ||||
At 31 Dec 2023 | ||||
Valuation techniques | ||||
Quoted market price | Using observable inputs | With significant unobservable inputs | ||
Level 1 | Level 2 | Level 3 | Total | |
€000 | €000 | €000 | €000 | |
Assets | ||||
Treasury Bills | 273,131 | 112,449 | — | 385,580 |
Derivatives | — | 13,577 | — | 13,577 |
Financial assets mandatorily measured at fair value through profit or loss | 684,821 | — | 8,203 | 693,024 |
Financial investments measured at fair value through other comprehensive income | 456,930 | — | 43 | 456,973 |
1,414,882 | 126,026 | 8,246 | 1,549,154 | |
Liabilities | ||||
Derivatives | — | 5,748 | — | 5,748 |
Liabilities under investment contracts | 156,958 | — | — | 156,958 |
156,958 | 5,748 | — | 162,706 | |
At 31 Dec 2022 | ||||
Assets | ||||
Treasury Bills | — | 242,292 | — | 242,292 |
Derivatives | — | 25,745 | — | 25,745 |
Financial assets mandatorily measured at fair value through profit or loss | 652,466 | — | 7,980 | 660,446 |
Financial investments measured at fair value through other comprehensive income | 637,709 | — | 37 | 637,746 |
1,290,175 | 268,037 | 8,017 | 1,566,229 | |
Liabilities | ||||
Derivatives | — | 10,252 | — | 10,252 |
Liabilities under investment contracts | 162,123 | — | — | 162,123 |
162,123 | 10,252 | — | 172,375 | |
Bank | ||||
At 31 Dec 2023 | ||||
Assets | ||||
Treasury Bills | 273,131 | 112,449 | — | 385,580 |
Derivatives | — | 13,577 | — | 13,577 |
Financial investments measured at fair value through other comprehensive income | 456,930 | — | 41 | 456,971 |
730,061 | 126,026 | 41 | 856,128 | |
Liabilities | ||||
Derivatives | — | 5,748 | — | 5,748 |
— | 5,748 | — | 5,748 | |
At 31 Dec 2022 | ||||
Assets | ||||
Treasury Bills | — | 242,292 | — | 242,292 |
Derivatives | — | 25,745 | — | 25,745 |
Financial investments measured at fair value through other comprehensive income | 637,709 | — | 35 | 637,744 |
637,709 | 268,037 | 35 | 905,781 | |
Liabilities | ||||
Derivatives | — | 10,252 | — | 10,252 |
— | 10,252 | — | 10,252 | |
138 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Level 3 | ||||
Financial assets mandatorily measured at fair value through profit or loss | ||||
At 1 Jan | 7,980 | 4,610 | — | — |
Disposal/redemptions | (693) | (738) | — | — |
Transfer from Level 1 to Level 3 | 1,285 | — | — | — |
Transfer from Level 2 to Level 3 | — | 4,077 | — | — |
Changes in fair value (recognised in profit or loss) | (369) | 31 | — | — |
At 31 Dec | 8,203 | 7,980 | — | — |
Group/Bank | ||
2023 | 2022 | |
€000 | €000 | |
Assets | ||
Property | 46,122 | 38,092 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 139 |
At 31 Dec 2023 | ||||
Fair value | Valuation technique | Significant unobservable input | Range of unobservable inputs (weighted average) | |
Description by class based on highest and best use | €000 | € per square metre | ||
Current use as commercial branches, bank offices and other related premises | 46,122 | |||
At 31 Dec 2022 | ||||
Current use as commercial branches, bank offices and other related premises | 38,092 | Capitalised rental approach | Rental rate per square metre | |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Assets | ||||
Balances with Central Bank of Malta, Treasury Bills and cash | 1,291,059 | 1,341,056 | 1,291,059 | 1,341,056 |
Items in the course of collection from other banks | 8,427 | 6,921 | 8,427 | 6,921 |
Loans and advance to banks | 720,583 | 732,493 | 716,140 | 726,217 |
Loans and advance to customers | 3,083,843 | 3,175,167 | 3,083,843 | 3,175,167 |
Financial investments measured at amortised cost | 858,886 | 367,024 | 858,886 | 367,024 |
Accrued interest | 22,323 | 18,134 | 19,705 | 15,639 |
Other assets | 8,955 | 12,108 | 8,851 | 12,014 |
5,994,076 | 5,652,903 | 5,986,911 | 5,644,038 | |
Liabilities | ||||
Deposits by banks | 5,117 | 2,861 | 5,117 | 2,861 |
Customer accounts | 6,141,520 | 5,970,958 | 6,172,269 | 6,010,392 |
Items in the course of transmission to other banks | 18,359 | 27,397 | 18,359 | 27,397 |
Borrowings from a group undertaking | 90,000 | 60,000 | 90,000 | 60,000 |
Subordinated liabilities | 65,000 | 62,000 | 65,000 | 62,000 |
Accrued interest | 4,976 | 1,864 | 4,771 | 1,677 |
Other liabilities | 24,039 | 14,193 | 8,472 | 8,968 |
6,349,011 | 6,139,273 | 6,363,988 | 6,173,295 | |
140 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Group/Bank | ||
2023 | 2022 | |
€000 | €000 | |
On balances with Central Bank of Malta | 42,977 | 5,062 |
On Treasury Bills | 6,845 | 690 |
On loans and advances to banks | 29,397 | 7,041 |
On loans and advances to customers | 116,636 | 101,154 |
On loans and advances to banks and customers and other financial assets | 195,855 | 113,947 |
Interest on debt instruments | 13,766 | 6,384 |
Amortisation of net premiums on debt instruments | 4,289 | (3,551) |
Net loss representing ineffective portion of fair value hedges | (34) | (141) |
On debt and other fixed income instruments | 18,021 | 2,692 |
213,876 | 116,639 | |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 141 |
Group/Bank | ||
2023 | 2022 | |
€000 | €000 | |
On balances with Central Bank of Malta | — | 2,663 |
On Treasury Bills | — | 441 |
On loans and advances to banks | — | 182 |
On deposits by banks | 3,900 | 74 |
On customer accounts | 10,792 | 2,953 |
On lease liabilities | 53 | 38 |
On subordinated liabilities and borrowings from a group undertaking | 3,319 | 2,046 |
18,064 | 8,397 | |
Group | |||
2023 | |||
Wealth and Personal Banking | Commercial Banking | Total | |
€000 | €000 | €000 | |
Fee income by product: | |||
Funds under management | 2,555 | — | 2,555 |
Cards | 4,558 | 439 | 4,997 |
Credit facilities | 7 | 1,374 | 1,381 |
Broking income | 835 | — | 835 |
Account services | 1,439 | 1,671 | 3,110 |
Remittances | 697 | 1,583 | 2,280 |
Imports/exports | — | 1,241 | 1,241 |
Receivables finance | — | 799 | 799 |
Insurance agency commission | 1,613 | — | 1,613 |
Other | 1,500 | 1,953 | 3,453 |
Fee income | 13,204 | 9,060 | 22,264 |
Less: fee expense | (2,520) | (271) | (2,791) |
Net fee income | 10,684 | 8,789 | 19,473 |
Group | |||
20221 | |||
Wealth and Personal Banking | Commercial Banking | Total | |
€000 | €000 | €000 | |
Fee income by product: | |||
Funds under management | 2,787 | — | 2,787 |
Cards | 4,600 | 367 | 4,967 |
Credit facilities | 108 | 1,474 | 1,582 |
Broking income | 1,022 | — | 1,022 |
Account services | 2,026 | 3,319 | 5,345 |
Remittances | 657 | 1,346 | 2,003 |
Imports/exports | — | 1,373 | 1,373 |
Receivables finance | — | 869 | 869 |
Insurance agency commission | 1,690 | — | 1,690 |
Other | 1,793 | 1,912 | 3,705 |
Fee income | 14,683 | 10,660 | 25,343 |
Less: fee expense | (3,322) | (367) | (3,689) |
Net fee income | 11,361 | 10,293 | 21,654 |
142 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Bank | |||
2023 | |||
Wealth and Personal Banking | Commercial Banking | Total | |
€000 | €000 | €000 | |
Fee income by product: | |||
Funds under management | — | — | — |
Cards | 4,558 | 439 | 4,997 |
Credit facilities | 7 | 1,374 | 1,381 |
Broking income | 835 | — | 835 |
Account services | 1,439 | 1,671 | 3,110 |
Remittances | 697 | 1,583 | 2,280 |
Imports/exports | — | 1,241 | 1,241 |
Receivables finance | — | 799 | 799 |
Insurance agency commission | — | — | — |
Other | 2,924 | 1,953 | 4,877 |
Fee income | 10,460 | 9,060 | 19,520 |
Less: fee expense | (2,128) | (271) | (2,399) |
Net fee income | 8,332 | 8,789 | 17,121 |
Bank | |||
2022 | |||
Wealth and Personal Banking | Commercial Banking | Total | |
€000 | €000 | €000 | |
Fee income by product: | |||
Funds under management | — | — | — |
Cards | 4,600 | 367 | 4,967 |
Credit facilities | 108 | 1,474 | 1,582 |
Broking income | 1,022 | — | 1,022 |
Account services | 2,026 | 3,319 | 5,345 |
Remittances | 657 | 1,346 | 2,003 |
Imports/exports | — | 1,373 | 1,373 |
Receivables finance | — | 869 | 869 |
Insurance agency commission | — | — | — |
Other | 3,317 | 1,912 | 5,229 |
Fee income | 11,730 | 10,660 | 22,390 |
Less: fee expense | (2,846) | (367) | (3,213) |
Net fee income | 8,884 | 10,293 | 19,177 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 143 |
2023 | 2022 | |||||
Life direct participating and investment DPF contracts1 | Life other contracts2 | Total | Life direct participating and investment DPF contracts | Life other contracts | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | |
Insurance revenue | ||||||
Amounts relating to changes in liabilities for remaining coverage | ||||||
CSM recognised for services provided | 1,203 | 6,307 | 7,510 | 1,030 | 5,868 | 6,898 |
Change in risk adjustment for non-financial risk for risk expired | 249 | 201 | 450 | 218 | 252 | 470 |
Expected incurred claims and other insurance service expenses | 3,609 | 6,352 | 9,961 | 3,115 | 4,962 | 8,077 |
Recovery of insurance acquisition cash flows | 52 | 316 | 368 | 15 | 105 | 120 |
Total insurance revenue | 5,113 | 13,176 | 18,289 | 4,378 | 11,187 | 15,565 |
Insurance service expenses | ||||||
Incurred claims and other insurance service expenses | (2,909) | (3,006) | (5,915) | (2,693) | (2,068) | (4,761) |
Losses and reversal of losses on onerous contracts | (1,284) | (221) | (1,505) | (440) | (154) | (594) |
Amortisation of insurance acquisition cash flows | (52) | (316) | (368) | (15) | (105) | (120) |
Total insurance service expenses | (4,245) | (3,543) | (7,788) | (3,148) | (2,327) | (5,475) |
Insurance service results before reinsurance contracts | 868 | 9,633 | 10,501 | 1,230 | 8,860 | 10,090 |
Expenses from reinsurance premiums | — | (7,603) | (7,603) | — | (5,855) | (5,855) |
Amounts recoverable from reinsurers for incurred claims | — | 2,132 | 2,132 | — | 1,043 | 1,043 |
Net expenses from reinsurance contracts | — | (5,471) | (5,471) | — | (4,812) | (4,812) |
Insurance service results | 868 | 4,162 | 5,030 | 1,230 | 4,048 | 5,278 |
2023 | 2022 | |||||||
Life direct participating and investment DPF contracts | Life other contracts | Other | Total | Life direct participating and investment DPF contracts | Life other contracts | Other | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | ||
Investment return | ||||||||
Amounts recognised in profit or loss: | ||||||||
Amounts recognised in OCI2 | ||||||||
Net gains/(losses) on FVPL investments | 42,064 | 5,794 | 11,355 | 59,213 | (62,696) | (12,774) | (16,365) | (91,835) |
Movement in investment contract liabilities (Note 37) | — | — | (11,145) | (11,145) | — | — | 17,091 | 17,091 |
Total investment return (memorandum) | 42,064 | 5,794 | 210 | 48,068 | (62,696) | (12,774) | 726 | (74,744) |
Changes in fair value of underlying items of direct participating contracts | (42,064) | — | — | (42,064) | 62,696 | — | — | 62,696 |
Effect of risk mitigation option | — | — | — | — | — | — | ||
Interest accreted | — | (15) | — | (15) | — | (86) | — | (86) |
Effect of changes in interest rates and other financial assumptions | — | (957) | — | (957) | — | 9,950 | — | 9,950 |
Effect of measuring changes in estimates at current rates and adjusting the CSM at rates on initial recognition | — | (881) | — | (881) | — | (714) | — | (714) |
Total net finance (expense)/income from insurance contracts | (42,064) | (1,853) | — | (43,917) | 62,696 | 9,150 | — | 71,846 |
Represented by: | ||||||||
Amounts recognised in profit or loss | — | — | — | — | — | — | — | — |
Amounts recognised in OCI | — | — | — | — | — | — | ||
Total net finance (expense)/income from reinsurance contracts | — | (377) | — | (377) | — | 4,650 | — | 4,650 |
Insurance finance (expense)/income | (42,064) | (2,230) | — | (44,294) | 62,696 | 13,800 | — | 76,496 |
Total net investment results | — | 3,564 | 210 | 3,774 | — | 1,026 | 726 | 1,752 |
144 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
2023 | |||||||||
Life direct participating and investment DPF contracts | Life other contracts1 | ||||||||
Liabilities for remaining coverage: | Liabilities for remaining coverage: | ||||||||
Excluding loss component | Loss component | Incurred claims | Total | Excluding loss component | Loss component | Incurred claims | Total | Total | |
Opening assets | — | — | — | — | — | — | — | — | — |
Opening liabilities | 442,272 | 287 | 4,468 | 447,027 | 49,300 | 159 | 3,021 | 52,480 | 499,507 |
Net opening balance at 1 Jan | 442,272 | 287 | 4,468 | 447,027 | 49,300 | 159 | 3,021 | 52,480 | 499,507 |
Changes in profit or loss | |||||||||
Insurance revenue | |||||||||
Contract under fair value approach | (4,402) | — | — | (4,402) | (10,678) | — | — | (10,678) | (15,080) |
Other contracts | (711) | — | — | (711) | (2,498) | — | — | (2,498) | (3,209) |
Total insurance revenue | (5,113) | — | — | (5,113) | (13,176) | — | — | (13,176) | (18,289) |
Insurance service expenses | |||||||||
Incurred claims and other insurance service expenses | — | (15) | 2,924 | 2,909 | — | (76) | 3,082 | 3,006 | 5,915 |
Amortisation of insurance acquisition cash flows | 52 | — | — | 52 | 316 | — | — | 316 | 368 |
Losses and reversal of losses on onerous contracts | — | 1,284 | — | 1,284 | — | 221 | — | 221 | 1,505 |
Total insurance service expenses | 52 | 1,269 | 2,924 | 4,245 | 316 | 145 | 3,082 | 3,543 | 7,788 |
Investment components | (60,984) | — | 60,984 | — | (228) | — | 228 | — | — |
Insurance service result before reinsurance contracts | (66,045) | 1,269 | 63,908 | (868) | (13,088) | 145 | 3,310 | (9,633) | (10,501) |
Net finance expenses from insurance contracts | 42,064 | — | — | 42,064 | 1,853 | — | — | 1,853 | 43,917 |
Total changes in profit or loss | (23,981) | 1,269 | 63,908 | 41,196 | (11,235) | 145 | 3,310 | (7,780) | 33,416 |
Cash flows | |||||||||
Premiums received | 41,569 | — | — | 41,569 | 14,447 | — | — | 14,447 | 56,016 |
Claims and other insurance service expenses paid, including investment components | (312) | — | (64,143) | (64,455) | — | — | (2,852) | (2,852) | (67,307) |
Insurance acquisition cash flows | (443) | — | — | (443) | (1,826) | — | — | (1,826) | (2,269) |
Transfer | 27 | (27) | — | — | 9 | (9) | — | — | — |
Total cash flows | 40,841 | (27) | (64,143) | (23,329) | 12,630 | (9) | (2,852) | 9,769 | (13,560) |
Net closing balance at 31 Dec | 459,132 | 1,529 | 4,233 | 464,894 | 50,695 | 295 | 3,479 | 54,469 | 519,363 |
Closing assets | — | — | — | — | — | — | — | — | — |
Closing liabilities | 459,132 | 1,529 | 4,233 | 464,894 | 50,695 | 295 | 3,479 | 54,469 | 519,363 |
Net closing balance 31 Dec | 459,132 | 1,529 | 4,233 | 464,894 | 50,695 | 295 | 3,479 | 54,469 | 519,363 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 145 |
2022 | |||||||||
Life direct participating and investment DPF contracts | Life other contracts1 | ||||||||
Liabilities for: | Liabilities for: | ||||||||
Excluding loss component | Loss component | Incurred claims | Total | Excluding loss component | Loss component | Incurred claims | Total | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |
Opening assets | — | — | — | — | — | — | — | — | — |
Opening liabilities | 521,333 | 7 | 1,530 | 522,870 | 57,009 | 46 | 2,448 | 59,503 | 582,373 |
Net opening balance at 1 Jan | 521,333 | 7 | 1,530 | 522,870 | 57,009 | 46 | 2,448 | 59,503 | 582,373 |
Changes in profit or loss | |||||||||
Insurance revenue | |||||||||
Contract under fair value approach | (3,894) | — | — | (3,894) | (9,552) | — | — | (9,552) | (13,446) |
Other contracts | (484) | — | — | (484) | (1,635) | — | — | (1,635) | (2,119) |
Total insurance revenue | (4,378) | — | — | (4,378) | (11,187) | — | — | (11,187) | (15,565) |
Insurance service expenses | |||||||||
Incurred claims and other insurance service expenses | — | (3) | 2,696 | 2,693 | — | (39) | 2,107 | 2,068 | 4,761 |
Amortisation of insurance acquisition cash flows | 15 | — | — | 15 | 105 | — | — | 105 | 120 |
Losses and reversal of losses on onerous contracts | — | 440 | — | 440 | — | 154 | — | 154 | 594 |
Total insurance service expenses | 15 | 437 | 2,696 | 3,148 | 105 | 115 | 2,107 | 2,327 | 5,475 |
Investment components | (53,680) | — | 53,680 | — | (211) | — | 211 | — | — |
Insurance service result before reinsurance contracts | (58,043) | 437 | 56,376 | (1,230) | (11,293) | 115 | 2,318 | (8,860) | (10,090) |
Net finance expenses from insurance contracts | (62,696) | — | — | (62,696) | (9,150) | — | — | (9,150) | (71,846) |
Total changes in profit or loss | (120,739) | 437 | 56,376 | (63,926) | (20,443) | 115 | 2,318 | (18,010) | (81,936) |
Cash flows | |||||||||
Premiums received | 42,223 | — | — | 42,223 | 14,506 | — | — | 14,506 | 56,729 |
Claims and other insurance service expenses paid, including investment components | (332) | — | (53,438) | (53,770) | — | — | (1,745) | (1,745) | (55,515) |
Insurance acquisition cash flows | (370) | — | — | (370) | (1,774) | — | — | (1,774) | (2,144) |
Transfer | 157 | (157) | — | — | 2 | (2) | — | — | — |
Total cash flows | 41,678 | (157) | (53,438) | (11,917) | 12,734 | (2) | (1,745) | 10,987 | (930) |
Net closing balance at 31 Dec | 442,272 | 287 | 4,468 | 447,027 | 49,300 | 159 | 3,021 | 52,480 | 499,507 |
Closing assets | — | — | — | — | — | — | — | — | — |
Closing liabilities | 442,272 | 287 | 4,468 | 447,027 | 49,300 | 159 | 3,021 | 52,480 | 499,507 |
Net closing balance 31 Dec | 442,272 | 287 | 4,468 | 447,027 | 49,300 | 159 | 3,021 | 52,480 | 499,507 |
146 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
2023 | 2022 | |||||||
Excluding loss recovery component | Loss recovery component | Incurred claims component | Total | Excluding loss recovery component | Loss recovery component | Incurred claims component | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |
Opening assets | 417 | 7 | 2,535 | 2,959 | (2,742) | — | 2,805 | 63 |
Opening liabilities | — | — | — | — | — | — | — | — |
Net opening balance at 1 Jan | 417 | 7 | 2,535 | 2,959 | (2,742) | — | 2,805 | 63 |
Changes in profit or loss | ||||||||
Allocation of reinsurance premiums paid | (7,603) | — | — | (7,603) | (5,855) | — | — | (5,855) |
Recoveries of incurred claims and other insurance service expenses | — | — | 2,143 | 2,143 | — | — | 1,030 | 1,030 |
Recoveries or reversals of recoveries of losses on onerous underlying contracts | (16) | 5 | — | (11) | 6 | 7 | — | 13 |
Net finance (expense)/income from reinsurance contracts | (377) | — | — | (377) | 4,650 | — | — | 4,650 |
Total changes in profit or loss | (7,996) | 5 | 2,143 | (5,848) | (1,199) | 7 | 1,030 | (162) |
Cash flows | ||||||||
Premiums paid | 7,357 | — | — | 7,357 | 4,358 | — | — | 4,358 |
Claims and other recoverables received | — | — | (1,911) | (1,911) | — | — | (1,300) | (1,300) |
Total cash flows | 7,357 | — | (1,911) | 5,446 | 4,358 | — | (1,300) | 3,058 |
Net closing balance at 31 Dec | (222) | 12 | 2,767 | 2,557 | 417 | 7 | 2,535 | 2,959 |
Closing assets | (222) | 12 | 2,767 | 2,557 | 417 | 7 | 2,535 | 2,959 |
Closing liabilities | — | — | — | — | — | — | — | — |
Net closing balance at 31 Dec | (222) | 12 | 2,767 | 2,557 | 417 | 7 | 2,535 | 2,959 |
2023 | ||||||
Life direct participating and investment DPF contracts | ||||||
Contractual service margin | ||||||
Estimates of present value of future cashflows (excluding RA) | Risk adjustment for non-financial risk | Estimates of present value of future cashflows (including RA) | Contracts under fair value approach | Other contracts1 | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | |
Opening assets | — | — | — | — | — | — |
Opening liabilities | 436,224 | 3,086 | 439,310 | 4,286 | 3,431 | 447,027 |
Net opening balance at 1 Jan | 436,224 | 3,086 | 439,310 | 4,286 | 3,431 | 447,027 |
Changes in profit or loss | ||||||
Changes that relate to current services | ||||||
CSM recognised for services provided | — | — | — | (868) | (335) | (1,203) |
Change in risk adjustment for non-financial risk for risk expired | — | (249) | (249) | — | — | (249) |
Experience adjustments | (700) | — | (700) | — | — | (700) |
Changes that relate to future services | ||||||
Contracts initially recognised in the year | (916) | 140 | (776) | — | 809 | 33 |
Changes in estimates that adjust the CSM | (2,547) | 466 | (2,081) | 2,052 | 29 | — |
Changes in estimates that result in losses and reversal of losses on onerous contracts | 1,051 | 200 | 1,251 | — | — | 1,251 |
Insurance service result before reinsurance contracts | (3,112) | 557 | (2,555) | 1,184 | 503 | (868) |
Net finance expenses from insurance contracts | 42,064 | — | 42,064 | — | — | 42,064 |
Total changes in profit or loss | 38,952 | 557 | 39,509 | 1,184 | 503 | 41,196 |
Cash flows | ||||||
Premiums received | 41,569 | — | 41,569 | — | — | 41,569 |
Claims, other insurance service expenses paid (including investment components) and other cash flows | (64,455) | — | (64,455) | — | — | (64,455) |
Insurance acquisition cash flows | (443) | — | (443) | — | — | (443) |
Total cash flows | (23,329) | — | (23,329) | — | — | (23,329) |
Net closing balance at 31 Dec | 451,847 | 3,643 | 455,490 | 5,470 | 3,934 | 464,894 |
Closing assets | — | — | — | — | — | — |
Closing liabilities | 451,847 | 3,643 | 455,490 | 5,470 | 3,934 | 464,894 |
Net closing balance at 31 Dec | 451,847 | 3,643 | 455,490 | 5,470 | 3,934 | 464,894 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 147 |
2023 | ||||||
Life other contracts | ||||||
Contractual service margin | ||||||
Estimates of present value of future cashflows (excluding RA) | Risk adjustment for non-financial risk | Estimates of present value of future cashflows (including RA) | Contract under fair value approach | Other contracts1 | Total | |
Opening assets | — | — | — | — | — | — |
Opening liabilities | (4,151) | 5,800 | 1,649 | 44,558 | 6,273 | 52,480 |
Net opening balance at 1 Jan | (4,151) | 5,800 | 1,649 | 44,558 | 6,273 | 52,480 |
Changes in profit or loss | ||||||
Changes that relate to current services | ||||||
CSM recognised for services provided | — | — | — | (5,314) | (993) | (6,307) |
Change in risk adjustment for non-financial risk for risk expired | — | (201) | (201) | — | — | (201) |
Experience adjustments | (3,346) | — | (3,346) | — | — | (3,346) |
Changes that relate to future services | ||||||
Contracts initially recognised in the year | (1,975) | 179 | (1,796) | — | 1,821 | 25 |
Changes in estimates that adjust the CSM | (9,299) | 186 | (9,113) | 7,830 | 1,283 | — |
Changes in estimates that result in losses and reversal of losses on onerous contracts | 175 | 21 | 196 | — | — | 196 |
Insurance service result before reinsurance contracts | (14,445) | 185 | (14,260) | 2,516 | 2,111 | (9,633) |
Net finance expenses from insurance contracts | 1,508 | — | 1,508 | 312 | 33 | 1,853 |
Total changes in profit or loss | (12,937) | 185 | (12,752) | 2,828 | 2,144 | (7,780) |
Cash flows | ||||||
Premiums received | 14,447 | — | 14,447 | — | — | 14,447 |
Claims, other insurance service expenses paid (including investment components) and other cash flows | (2,852) | — | (2,852) | — | — | (2,852) |
Insurance acquisition cash flows | (1,826) | — | (1,826) | — | — | (1,826) |
Total cash flows | 9,769 | — | 9,769 | — | — | 9,769 |
Net closing balance at 31 Dec | (7,319) | 5,985 | (1,334) | 47,386 | 8,417 | 54,469 |
Closing assets | — | — | — | — | — | — |
Closing liabilities | (7,319) | 5,985 | (1,334) | 47,386 | 8,417 | 54,469 |
Net closing balance at 31 Dec | (7,319) | 5,985 | (1,334) | 47,386 | 8,417 | 54,469 |
148 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
2022 | ||||||
Life direct participating and investment DPF contracts | ||||||
Contractual service margin | ||||||
Estimates of present value of future cashflows (excluding RA) | Risk adjustment for non-financial risk | Estimates of present value of future cashflows (including RA) | Contracts under fair value approach | Other contracts1 | Total | |
Opening assets | — | — | — | — | — | — |
Opening liabilities | 505,890 | 3,236 | 509,126 | 11,016 | 2,728 | 522,870 |
Net opening balance at 1 Jan | 505,890 | 3,236 | 509,126 | 11,016 | 2,728 | 522,870 |
Changes in profit or loss | ||||||
Changes that relate to current services | ||||||
CSM recognised for services provided | — | — | — | (747) | (283) | (1,030) |
Change in risk adjustment for non-financial risk for risk expired | — | (218) | (218) | — | — | (218) |
Experience adjustments | (422) | — | (422) | — | — | (422) |
Changes that relate to future services | ||||||
Contracts initially recognised in the year | (1,427) | 176 | (1,251) | — | 1,301 | 50 |
Changes in estimates that adjust the CSM | 6,422 | (124) | 6,298 | (5,983) | (315) | — |
Changes in estimates that result in losses and reversal of losses on onerous contracts | 374 | 16 | 390 | — | — | 390 |
Insurance service result before reinsurance contracts | 4,947 | (150) | 4,797 | (6,730) | 703 | (1,230) |
Net finance expenses from insurance contracts | (62,696) | — | (62,696) | — | — | (62,696) |
Total changes in profit or loss | (57,749) | (150) | (57,899) | (6,730) | 703 | (63,926) |
Cash flows | ||||||
Premiums received | 42,223 | — | 42,223 | — | — | 42,223 |
Claims, other insurance service expenses paid (including investment components) and other cash flows | (53,770) | — | (53,770) | — | — | (53,770) |
Insurance acquisition cash flows | (370) | — | (370) | — | — | (370) |
Total cash flows | (11,917) | — | (11,917) | — | — | (11,917) |
Net closing balance at 31 Dec | 436,224 | 3,086 | 439,310 | 4,286 | 3,431 | 447,027 |
Closing assets | — | — | — | — | — | — |
Closing liabilities | 436,224 | 3,086 | 439,310 | 4,286 | 3,431 | 447,027 |
Net closing balance at 31 Dec | 436,224 | 3,086 | 439,310 | 4,286 | 3,431 | 447,027 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 149 |
2022 | ||||||
Life other contracts | ||||||
Contractual service margin | ||||||
Estimates of present value of future cashflows (excluding RA) | Risk adjustment for non-financial risk | Estimates of present value of future cashflows (including RA) | Contract under fair value approach | Other contracts1 | Total | |
Opening assets | — | — | — | — | — | — |
Opening liabilities | (519) | 6,900 | 6,381 | 47,708 | 5,414 | 59,503 |
Net opening balance at 1 Jan | (519) | 6,900 | 6,381 | 47,708 | 5,414 | 59,503 |
Changes in profit or loss | ||||||
Changes that relate to current services | ||||||
CSM recognised for services provided | — | — | — | (5,125) | (743) | (5,868) |
Change in risk adjustment for non-financial risk for risk expired | — | (252) | (252) | — | — | (252) |
Experience adjustments | (2,894) | — | (2,894) | — | — | (2,894) |
Changes that relate to future services | ||||||
Contracts initially recognised in the year | (2,400) | 210 | (2,190) | — | 2,210 | 20 |
Changes in estimates that adjust the CSM | (165) | (1,062) | (1,227) | 1,813 | (586) | — |
Changes in estimates that result in losses and reversal of losses on onerous contracts | 130 | 4 | 134 | — | — | 134 |
Insurance service result before reinsurance contracts | (5,329) | (1,100) | (6,429) | (3,312) | 881 | (8,860) |
Net finance expenses from insurance contracts | (9,290) | — | (9,290) | 162 | (22) | (9,150) |
Total changes profit or loss | (14,619) | (1,100) | (15,719) | (3,150) | 859 | (18,010) |
Cash flows | ||||||
Premiums received | 14,506 | — | 14,506 | — | — | 14,506 |
Claims, other insurance service expenses paid (including investment components) and other cash flows | (1,745) | — | (1,745) | — | — | (1,745) |
Insurance acquisition cash flows | (1,774) | — | (1,774) | — | — | (1,774) |
Total cash flows | 10,987 | — | 10,987 | — | — | 10,987 |
Net closing balance at 31 Dec | (4,151) | 5,800 | 1,649 | 44,558 | 6,273 | 52,480 |
Closing assets | — | — | — | — | — | — |
Closing liabilities | (4,151) | 5,800 | 1,649 | 44,558 | 6,273 | 52,480 |
Net closing balance at 31 Dec | (4,151) | 5,800 | 1,649 | 44,558 | 6,273 | 52,480 |
150 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
2023 | ||||||
Estimates of present value of future cashflows (excluding RA) | Risk adjustment for non- financial risk | Contractual service margin | Total | |||
Estimates of present value of future cashflows (including RA) | Contracts under fair value approach | Other contracts1 | ||||
€000 | €000 | €000 | €000 | €000 | €000 | |
Opening assets | (17,844) | 1,296 | (16,548) | 19,532 | (25) | 2,959 |
Opening liabilities | — | — | — | — | — | — |
Net opening balance at 1 Jan | (17,844) | 1,296 | (16,548) | 19,532 | (25) | 2,959 |
Changes in profit or loss | ||||||
Changes that relate to current services | ||||||
CSM recognised for services provided | — | — | — | (3,252) | (273) | (3,525) |
Change in risk adjustment for non- | — | (34) | (34) | — | — | (34) |
Experience adjustments | (1,901) | — | (1,901) | — | — | (1,901) |
Changes that relate to future services | ||||||
Contracts initially recognised in the year | (241) | 29 | (212) | — | 212 | — |
Changes in recoveries of losses on onerous underlying contracts that adjust the CSM | — | — | — | — | 2 | 2 |
Changes in estimates that adjust the CSM | (13,086) | 323 | (12,763) | 11,764 | 999 | — |
Changes in estimates that do not adjust the CSM | (16) | 3 | (13) | — | — | (13) |
Net expenses from reinsurance contracts | (15,244) | 321 | (14,923) | 8,512 | 940 | (5,471) |
Net finance expenses from reinsurance contracts | (535) | — | (535) | 150 | 8 | (377) |
Total changes in profit or loss | (15,779) | 321 | (15,458) | 8,662 | 948 | (5,848) |
Cash flows | ||||||
Premiums paid | 7,357 | — | 7,357 | — | — | 7,357 |
Claims and other recoverables received | (1,911) | — | (1,911) | — | — | (1,911) |
Total cash flows | 5,446 | — | 5,446 | — | — | 5,446 |
Net closing balance at 31 Dec | (28,177) | 1,617 | (26,560) | 28,194 | 923 | 2,557 |
Closing assets | (28,177) | 1,617 | (26,560) | 28,194 | 923 | 2,557 |
Closing liabilities | — | — | — | — | — | — |
Net closing balance at 31 Dec | (28,177) | 1,617 | (26,560) | 28,194 | 923 | 2,557 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 151 |
2022 | ||||||
Estimates of present value of future cash flows (excluding RA) | Contractual service margin | Total | ||||
Risk adjustment for non-financial risk | Estimates of present value of future cash flows (including RA) | Contracts under fair value approach | Other contracts1 | |||
€000 | €000 | €000 | €000 | €000 | €000 | |
Opening assets | (20,644) | 1,771 | (18,873) | 18,936 | — | 63 |
Opening liabilities | — | — | — | — | — | — |
Net opening balance at 1 Jan | (20,644) | 1,771 | (18,873) | 18,936 | — | 63 |
Changes in profit or loss | ||||||
Changes that relate to current services | ||||||
CSM recognised for services provided | — | — | — | (2,550) | (169) | (2,719) |
Change in risk adjustment for non-financial risk for risk expired | — | (55) | (55) | — | — | (55) |
Experience adjustments | (2,073) | — | (2,073) | — | — | (2,073) |
Changes that relate to future services | ||||||
Contracts initially recognised in the year | (248) | 37 | (211) | — | 233 | 22 |
Changes in recoveries of losses on onerous underlying contracts that adjust the CSM | — | — | — | — | 5 | 5 |
Changes in estimates that adjust the CSM | (2,527) | (457) | (2,984) | 3,078 | (94) | — |
Changes in estimates that do not adjust the CSM | 8 | — | 8 | — | — | 8 |
Net expenses from reinsurance contracts | (4,840) | (475) | (5,315) | 528 | (25) | (4,812) |
Net finance income from reinsurance contracts | 4,582 | — | 4,582 | 68 | — | 4,650 |
Total changes in profit or loss | (258) | (475) | (733) | 596 | (25) | (162) |
Cash flows | ||||||
Premiums paid | 4,358 | — | 4,358 | — | — | 4,358 |
Claims and other recoverables received | (1,300) | — | (1,300) | — | — | (1,300) |
Total cash flows | 3,058 | — | 3,058 | — | — | 3,058 |
Net closing balance at 31 Dec | (17,844) | 1,296 | (16,548) | 19,532 | (25) | 2,959 |
Closing assets | (17,844) | 1,296 | (16,548) | 19,532 | (25) | 2,959 |
Closing liabilities | — | — | — | — | — | — |
Net closing balance at 31 Dec | (17,844) | 1,296 | (16,548) | 19,532 | (25) | 2,959 |
2023 | 2022 | |||||
Profitable contracts issued | Onerous contracts issued | Total | Profitable contracts issued | Onerous contracts issued | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | |
Life direct participating and investment DPF contracts | ||||||
Estimates of present value of cash outflows | 18,549 | 1,484 | 20,033 | 27,004 | 2,462 | 29,466 |
Estimates of present value of cash inflows | (19,489) | (1,460) | (20,949) | (28,478) | (2,415) | (30,893) |
Risk adjustment for non-financial risk | 131 | 9 | 140 | 173 | 3 | 176 |
Contractual service margin | 809 | — | 809 | 1,301 | — | 1,301 |
Losses recognised on initial recognition | — | 33 | 33 | — | 50 | 50 |
Life other contracts | ||||||
Estimates of present value of cash outflows | 4,461 | 191 | 4,652 | 4,830 | 249 | 5,079 |
Estimates of present value of cash inflows | (6,454) | (173) | (6,627) | (7,238) | (241) | (7,479) |
Risk adjustment for non-financial risk | 172 | 7 | 179 | 198 | 12 | 210 |
Contractual service margin | 1,821 | — | 1,821 | 2,210 | — | 2,210 |
Losses recognised on initial recognition | — | 25 | 25 | — | 20 | 20 |
2023 | 2022 | |
Profitable contracts issued | Profitable contracts issued | |
€000 | €000 | |
Life other contracts | ||
Estimates of present value of cash outflows | (1,433) | (1,438) |
Estimates of present value of cash inflows | 1,192 | 1,190 |
Risk adjustment for non-financial risk | 29 | 37 |
Contractual service margin | 212 | 233 |
152 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
less than 1 year | 1-2 years | 2-3 years | 3-4 years | 4-5 years | 5-10 years | 10-20 years | Over 20 years | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |
Insurance liability future cash flows | |||||||||
Life direct participating and investment DPF contracts | 11,219 | 3,103 | 4,141 | 27,874 | 22,425 | 86,282 | 146,364 | ||
Life other contracts | (3,552) | (6,562) | (5,975) | (5,536) | (5,006) | (14,951) | (547) | 34,810 | (7,319) |
Reinsurance contracts | 170 | 1,402 | 1,448 | 1,397 | 1,376 | 6,612 | 11,132 | 4,640 | 28,177 |
Net insurance liability future cash flows at 31 Dec 2023 | 7,837 | (2,057) | (386) | 23,735 | 18,795 | 77,943 | 185,814 | ||
Remaining contractual service margin | |||||||||
Life direct participating and investment DPF contracts | 1,255 | 1,120 | 1,014 | 868 | 725 | 2,330 | 1,708 | 384 | 9,404 |
Life other contracts | 5,876 | 5,311 | 4,801 | 4,334 | 3,918 | 14,481 | 13,008 | 4,074 | 55,803 |
Reinsurance contracts | (3,256) | (2,915) | (2,615) | (2,345) | (2,104) | (7,639) | (6,594) | (1,649) | (29,117) |
Remaining contractual service margin at 31 Dec 2023 | 3,875 | 3,516 | 3,200 | 2,857 | 2,539 | 9,172 | 8,122 | 2,809 | 36,090 |
Insurance liability future cash flows | |||||||||
Life direct participating and investment DPF contracts | 539 | 6,682 | 1,317 | 2,963 | 27,893 | 97,850 | 139,815 | ||
Life other contracts | (4,095) | (6,076) | (5,325) | (4,804) | (4,499) | (14,122) | (218) | 34,988 | (4,151) |
Reinsurance contracts | 827 | 780 | 811 | 817 | 786 | 2,401 | 7,159 | 4,263 | 17,844 |
Net insurance liability future cash flows at 31 Dec 2022 | (2,729) | 1,386 | (3,197) | (1,024) | 24,180 | 86,129 | 179,066 | ||
Remaining contractual service margin | |||||||||
Life direct participating and investment DPF contracts | 866 | 779 | 707 | 647 | 585 | 2,094 | 1,654 | 385 | 7,717 |
Life other contracts | 5,352 | 4,845 | 4,381 | 3,960 | 3,573 | 13,248 | 12,077 | 3,395 | 50,831 |
Reinsurance contracts | (2,279) | (2,048) | (1,819) | (1,619) | (1,440) | (5,139) | (4,216) | (947) | (19,507) |
Remaining contractual service margin at 31 Dec 2022 | 3,939 | 3,576 | 3,269 | 2,988 | 2,718 | 10,203 | 9,515 | 2,833 | 39,041 |
Group | ||
2023 | 20221 | |
€000 | €000 | |
Financial assets held to meet liabilities under insurance and investment contracts | 59,213 | (91,835) |
Liabilities to customers under investment contracts | (11,145) | 17,091 |
Net income/(expense) from assets and liabilities of insurance businesses, measured at fair value through profit or loss | 48,068 | (74,744) |
Group/Bank | ||
2023 | 2022 | |
€000 | €000 | |
Net income from foreign exchange activities | 7,357 | 6,854 |
Net income from trading activities | 266 | 835 |
7,623 | 7,689 | |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Operating income | ||||
Gains arising on disposal of re-possessed properties | 45 | 749 | 45 | 749 |
Impairment of re-possessed property | (450) | — | (450) | — |
Gains arising on disposal of own properties held as Non-current assets held for sale | — | 440 | — | 440 |
Loss arising on disposal of equipment and intangible assets | (140) | — | (140) | — |
Other income | 503 | (7) | 509 | 325 |
(42) | 1,182 | (36) | 1,514 | |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 153 |
Group/Bank | ||
2023 | 2022 | |
€000 | €000 | |
Change in expected credit losses: | ||
– loans and advances to customers including accrued interest | (3,675) | (15,478) |
– loans and advances to banks | (1) | (1) |
– balances with Central Bank of Malta | 8 | 5 |
– debt instruments and Treasury Bills measured at amortised cost | 10 | 19 |
– loan commitments and financial guarantees | (4) | 56 |
– other financial assets | (4) | 5 |
– debt instruments and Treasury Bills measured at fair value through other comprehensive income | (15) | (12) |
Other credit impairment charges: | ||
– bad debts written off | 567 | 15,204 |
– bad debts recovered | (1,466) | (9,359) |
(4,580) | (9,561) | |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Wages, salaries and allowances | 35,747 | 34,373 | 34,717 | 33,287 |
Social security costs | 2,224 | 2,071 | 2,084 | 2,004 |
Termination benefits | 822 | 1,558 | 822 | 1,558 |
Defined contribution benefits | 483 | 499 | 449 | 466 |
Post employment and other long-term employee benefits | 2,913 | 275 | 2,913 | 275 |
Share-based payments | 418 | 176 | 418 | 194 |
42,607 | 38,952 | 41,403 | 37,784 | |
Average number of employees: | ||||
– executive and senior managerial | 262 | 253 | 240 | 233 |
– other managerial, supervisory and clerical | 674 | 672 | 641 | 634 |
– others | 4 | 6 | 4 | 6 |
940 | 931 | 885 | 873 | |
154 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Group | Bank | |||
2023 | 20221 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Premises and equipment costs | 3,191 | 4,181 | 3,184 | 4,175 |
IT support and telecommunication costs | 9,537 | 8,857 | 9,393 | 8,593 |
Insurance, security and maintenance costs | 2,368 | 2,159 | 2,368 | 2,159 |
Investment management and administrator fees | 625 | 277 | — | — |
Actuarial services | 597 | 993 | — | — |
Service contracted out costs | 14,069 | 12,919 | 13,046 | 12,072 |
Movement in litigation provision | 478 | 903 | 598 | 783 |
Regulatory fees | 5,989 | 5,822 | 5,949 | 5,777 |
Professional fees | 2,370 | 1,612 | 1,417 | 1,280 |
Other administrative expenses | 12,153 | 14,941 | 12,183 | 14,251 |
51,377 | 52,664 | 48,138 | 49,090 | |
2023 | 20221 | |||||
Expenses attributed to insurance acquisition cashflow | Other directly attributable expenses | Other operating expenses | Expenses attributed to insurance acquisition cashflow | Other directly attributable expenses | Other operating expenses | |
€000 | €000 | €000 | €000 | €000 | €000 | |
Employees compensation and benefits | 761 | 560 | 42,607 | 664 | 489 | 38,952 |
General and admin expenses | 978 | 1,144 | 51,377 | 885 | 1,080 | 52,664 |
Depreciation and amortisation | 88 | 65 | 8,412 | 39 | 28 | 8,154 |
1,827 | 1,769 | 102,396 | 1,588 | 1,597 | 99,770 | |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 155 |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Current tax: | 46,977 | 13,328 | 44,482 | 12,668 |
– for this year | 46,977 | 13,340 | 44,482 | 12,680 |
– adjustments in respect of prior years | — | (12) | — | (12) |
Deferred tax: | 121 | 6,078 | 353 | 5,385 |
– origination and reversal of temporary differences | 121 | 6,078 | 353 | 5,385 |
47,098 | 19,406 | 44,835 | 18,053 | |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Profit before tax | 133,854 | 55,588 | 128,134 | 52,560 |
Tax at the applicable rate of 35% | 46,849 | 19,456 | 44,847 | 18,396 |
Tax effect of: | ||||
– non-taxable income | — | (7) | — | — |
– income taxed at different rates | (31) | (434) | (31) | (434) |
– non-deductible expenses | 18 | 62 | 18 | 62 |
– disallowed expense arising from depreciation of property, plant and equipment | 126 | 117 | 126 | 117 |
– current tax adjustments in respect of prior years | — | (12) | — | (12) |
– tax credit on pension contribution | (113) | (111) | (113) | (111) |
– loss on disposal of property, plant and equipment | 44 | — | 44 | — |
– others | 205 | 335 | (56) | 35 |
Tax expense | 47,098 | 19,406 | 44,835 | 18,053 |
Group/Bank | ||||||
2023 | 2022 | |||||
Before tax | Tax (charge)/ credit | Net of tax | Before tax | Tax (charge)/ credit | Net of tax | |
€000 | €000 | €000 | €000 | €000 | €000 | |
Fair valuation of financial investments: | ||||||
– net changes in fair value | 13,386 | (4,685) | 8,701 | (35,655) | 12,479 | (23,176) |
Fair valuation of properties: | ||||||
– net changes in fair value | 1,826 | (183) | 1,643 | 185 | (19) | 166 |
Remeasurement of defined benefit obligation: | ||||||
– net remeasurement | (22) | 8 | (14) | 1,374 | (481) | 893 |
15,190 | (4,860) | 10,330 | (34,096) | 11,979 | (22,117) | |
156 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Bank | ||||
2023 | 2022 | 2023 | 2022 | |
EUR per share | EUR per share | €000 | €000 | |
Gross of income tax | ||||
– prior year’s final dividend | 0.06 | 0.03 | 20,214 | 12,323 |
– current year’s interim dividend | 0.06 | — | 21,617 | — |
0.12 | 0.03 | 41,831 | 12,323 | |
Net of income tax | ||||
– prior year’s final dividend | 0.04 | 0.02 | 13,139 | 8,010 |
– current year’s interim dividend | 0.04 | — | 14,051 | — |
0.08 | 0.02 | 27,190 | 8,010 | |
Bank | ||
2023 | 2022 | |
€000 | €000 | |
Proposed dividend | ||
Profit for the year | 83,299 | 34,507 |
Proposed dividend | 35,129 | 13,139 |
Less: interim dividend paid | (14,051) | — |
Available for distribution | 21,078 | 13,139 |
Proposed final dividend | ||
Issued and fully paid up shares (Note 42) | 360,306,099 | 360,306,099 |
EUR per share | EUR per share | |
Proposed final dividend | ||
– gross of income tax per share | 0.09 | 0.06 |
– net of income tax per share | 0.06 | |
Group/Bank | ||
2023 | 2022 | |
€000 | €000 | |
Balances with Central Bank of Malta | 1,257,477 | 1,269,354 |
Treasury Bills | ||
– measured at fair value through other comprehensive income | 385,580 | 242,292 |
– measured at amortised cost | — | 42,202 |
Cash | 33,582 | 29,500 |
1,676,639 | 1,583,348 | |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 157 |
Group | ||
2023 | 2022 | |
€000 | €000 | |
Debt securities and other fixed income instruments | 232,364 | 231,093 |
Equity and other non-fixed income instruments | 460,660 | 429,353 |
693,024 | 660,446 | |
Group | ||
2023 | 2022 | |
€000 | €000 | |
Issued by public bodies: | ||
– local government | 73,927 | 74,083 |
– foreign governments | 54,739 | 46,647 |
Issued by other bodies: | ||
– local banks | 5,088 | 6,122 |
– foreign banks | 9,806 | 18,834 |
– other local issuers | 14,746 | 9,578 |
– other foreign issuers | 74,058 | 75,829 |
232,364 | 231,093 | |
Listing status: | ||
– listed on the Malta Stock Exchange | 93,762 | 89,783 |
– listed on other recognised exchanges | 138,602 | 138,038 |
– unlisted | — | 3,272 |
232,364 | 231,093 | |
At 1 Jan | 231,093 | 270,806 |
Acquisitions | 92,122 | 42,324 |
Disposals/redemptions | (101,607) | (48,423) |
Changes in fair value | 10,756 | (33,614) |
At 31 Dec | 232,364 | 231,093 |
Group | ||
2023 | 2022 | |
€000 | €000 | |
Issued by other bodies: | ||
– local banks | 1,966 | — |
– foreign banks | 1,663 | 3,259 |
– other local issuers | 20,728 | 96,849 |
– other foreign issuers | 436,303 | 329,245 |
460,660 | 429,353 | |
Listing status: | ||
– listed on the Malta Stock Exchange | 9,081 | 14,306 |
– listed on other recognised exchanges | 42,082 | 40,232 |
– local unlisted | 94,367 | 82,543 |
– foreign unlisted | 315,130 | 292,272 |
460,660 | 429,353 | |
At 1 Jan | 429,353 | 497,002 |
Acquisitions | 27,061 | 23,102 |
Disposals | (35,582) | (27,857) |
Changes in fair value | 39,828 | (62,894) |
At 31 Dec | 460,660 | 429,353 |
158 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Group/Bank | ||||||||
Notional contract amount | Fair value - Assets | Fair value - Liabilities | ||||||
Trading | Hedging | Trading | Hedging | Total | Trading | Hedging | Total | |
€000 | €000 | €000 | €000 | €000 | €000 | €000 | €000 | |
Foreign exchange derivatives | ||||||||
Foreign exchange | 323,493 | — | 3,556 | — | 3,556 | 3,226 | — | 3,226 |
Interest rate derivatives | ||||||||
Interest rate swaps | 96,554 | 271,000 | 2,538 | 7,483 | 10,021 | 2,522 | — | 2,522 |
At 31 Dec 2023 | 420,047 | 271,000 | 6,094 | 7,483 | 13,577 | 5,748 | — | 5,748 |
Foreign exchange derivatives | ||||||||
Foreign exchange | 318,988 | — | 6,273 | — | 6,273 | 5,879 | — | 5,879 |
Interest rate derivatives | ||||||||
Interest rate swaps | 117,173 | 271,000 | 4,382 | 15,090 | 19,472 | 4,373 | — | 4,373 |
At 31 Dec 2022 | 436,161 | 271,000 | 10,655 | 15,090 | 25,745 | 10,252 | — | 10,252 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 159 |
Group/Bank | ||||||
Notional1 | Accumulated fair value movements since hedge inception | Balance sheet presentation | Change in fair value for the year2,3 | Hedge ineffectiveness recognised in profit and loss | Profit or loss presentation | |
€000 | €000 | €000 | €000 | |||
Hedging instrument | 271,000 | 6,560 | Derivatives | (8,613) | (34) | |
Hedged item | N/A | (6,735) | 8,579 | |||
At 31 Dec 2023 | 271,000 | (175) | (34) | (34) | ||
Hedging instrument | 271,000 | 15,173 | Derivatives | 15,173 | (141) | |
Hedged item | N/A | (15,314) | (15,314) | |||
At 31 Dec 2022 | 271,000 | (141) | (141) | (141) | ||
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Repayable on call and at short notice | 522,646 | 355,780 | 518,249 | 349,490 |
Term loans and advances | 197,937 | 376,727 | 197,891 | 376,727 |
720,583 | 732,507 | 716,140 | 726,217 | |
Group/Bank | ||
2023 | 2022 | |
€000 | €000 | |
Repayable on call and at short notice | 226,671 | 199,523 |
Term loans and advances | 2,902,650 | 3,023,378 |
Gross loans and advances to customers | 3,129,321 | 3,222,901 |
Allowance for ECL | (45,478) | (47,734) |
Net loans and advances to customers | 3,083,843 | 3,175,167 |
Allowance for ECL | ||
– allowances booked under stage 1 | 14,662 | 10,177 |
– allowances booked under stage 2 | 13,463 | 18,744 |
– allowances booked under stage 3 | 17,353 | 18,813 |
45,478 | 47,734 | |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Measured at fair value through other comprehensive income: | ||||
Debt instruments | 456,930 | 637,709 | 456,930 | 637,709 |
Equity and other non-fixed income instruments | 43 | 37 | 41 | 35 |
Measured at amortised cost: | ||||
Debt instruments | 858,886 | 367,024 | 858,886 | 367,024 |
1,315,859 | 1,004,770 | 1,315,857 | 1,004,768 | |
160 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Group/Bank | ||
2023 | 2022 | |
€000 | €000 | |
Issued by public bodies: | ||
– local government | 376,777 | 465,658 |
– foreign governments | 63,784 | 106,943 |
Issued by other bodies: | ||
– other foreign issuers | 16,369 | 65,108 |
456,930 | 637,709 | |
Listing status: | ||
– listed on the Malta Stock Exchange | 376,777 | 465,658 |
– listed on other recognised exchanges | 80,153 | 172,051 |
456,930 | 637,709 | |
At 1 Jan | 637,709 | 845,700 |
Exchange adjustments | (17) | 3,889 |
Amortisation of premium/discount | (2,839) | (5,166) |
Acquisitions | 79,039 | 99,384 |
Disposals/redemptions | (277,958) | (255,296) |
Changes in fair value | 20,996 | (50,802) |
At 31 Dec | 456,930 | 637,709 |
Group/Bank | ||
2023 | 2022 | |
€000 | €000 | |
Issued by public bodies: | ||
– local government | 70,393 | 20,459 |
– foreign governments | 374,158 | 173,650 |
Issued by other bodies: | ||
– other foreign issuers | 414,335 | 172,915 |
858,886 | 367,024 | |
Listing status: | ||
– listed on the Malta Stock Exchange | 70,393 | 20,459 |
– listed on other recognised exchanges | 788,493 | 346,565 |
858,886 | 367,024 | |
At 1 Jan | 367,024 | — |
Exchange adjustments | (31) | — |
Acquisitions | 489,865 | 365,409 |
Amortisation of premium/discount | 7,128 | 1,615 |
Disposals/redemptions | (5,100) | — |
At 31 Dec | 858,886 | 367,024 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 161 |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Issued by issuers other than public bodies and banks: | ||||
– local issuers | 7 | 7 | 5 | 5 |
– foreign issuers | 36 | 30 | 36 | 30 |
43 | 37 | 41 | 35 | |
Listing status: | ||||
– unlisted | 43 | 37 | 41 | 35 |
43 | 37 | 41 | 35 | |
Group | Bank | |||
2023 | 20221 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Gross accrued interest | 26,995 | 23,693 | 24,377 | 21,198 |
Allowance for ECL | (4,672) | (5,559) | (4,672) | (5,559) |
Net accrued interest | 22,323 | 18,134 | 19,705 | 15,639 |
Other accrued income | 2,071 | 1,134 | 1,966 | 1,040 |
Prepayments | 969 | 858 | 962 | 856 |
Committed letters of credit | 239 | 1,495 | 239 | 1,495 |
Amounts pledged in favour of the Single Resolution Fund | 1,760 | 1,513 | 1,760 | 1,513 |
Other | 6,337 | 10,958 | 5,454 | 8,470 |
33,699 | 34,092 | 30,086 | 29,013 | |
Group/Bank | ||
2023 | 2022 | |
€000 | €000 | |
Assets acquired in satisfaction of debt | 2,749 | 3,269 |
Assets held for sale attributable to closed branches | 3,067 | 1,904 |
5,816 | 5,173 | |
162 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Bank | ||||
Nature of business | 2023 | 2022 | ||
% | €000 | €000 | ||
HSBC Life Assurance (Malta) Ltd | Life insurance | 99.99 | 28,578 | 28,578 |
HSBC Global Asset Management (Malta) Limited | Portfolio management services | 99.99 | 2,281 | 2,281 |
30,859 | 30,859 | |||
Group | ||||
Fair value | Cost | Fair value | Cost | |
2023 | 2023 | 2022 | 2022 | |
€000 | €000 | €000 | €000 | |
Freehold land and buildings | ||||
At 1 Jan | — | — | 1,600 | 1,720 |
Disposals | — | — | (1,600) | (1,720) |
At 31 Dec | — | — | — | — |
Group/Bank | ||
2023 | 2022 | |
Right-of-use assets | €000 | €000 |
At 1 Jan | 2,459 | 2,569 |
Additions | 456 | 875 |
Impact of derecognition of leased assets | (90) | — |
Depreciation | (541) | (985) |
At 31 Dec | 2,284 | 2,459 |
Lease liabilities at 31 Dec | ||
Current | 488 | 435 |
Non-current | 1,792 | 1,991 |
2,280 | 2,426 | |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 163 |
Group/Bank | ||
2023 | 2022 | |
€000 | €000 | |
The income statement reflects the following amounts relating to leases: | ||
Depreciation charge of right-of-use assets | 541 | 985 |
Interest expense | 53 | 38 |
Expense relating to short-term leases (included in administrative expenses) | 47 | 10 |
Expense relating to leases of low-value assets that are not shown above as short-term leases (included in administrative expenses) | 332 | 287 |
Group | ||||
Land and buildings | Computer equipment | Others | Total | |
€000 | €000 | €000 | €000 | |
Cost/revaluation | ||||
At 1 Jan 2023 | 39,884 | 18,593 | 36,280 | 94,757 |
Additions | 8,126 | 427 | 570 | 9,123 |
Revaluation | 1,808 | — | — | 1,808 |
Disposals/Write offs | (214) | (3,043) | (267) | (3,524) |
Transfers (refer to Note 28) | (1,210) | — | (10) | (1,220) |
At 31 Dec 2023 | 48,394 | 15,977 | 36,573 | 100,944 |
Accumulated depreciation and impairment losses | ||||
At 1 Jan 2023 | 1,792 | 17,165 | 31,173 | 50,130 |
Depreciation charge for the year | 257 | 502 | 1,272 | 2,031 |
Revaluation | (18) | — | — | (18) |
Disposals/Write offs | (214) | (2,959) | (259) | (3,432) |
Transfers (refer to Note 28) | (48) | — | (9) | (57) |
Impairment losses | 503 | — | 93 | 596 |
At 31 Dec 2023 | 2,272 | 14,708 | 32,270 | 49,250 |
Carrying amount at 1 Jan 2023 | 38,092 | 1,428 | 5,107 | 44,627 |
Carrying amount at 31 Dec 2023 | 46,122 | 1,269 | 4,303 | 51,694 |
Cost/revaluation | ||||
At 1 Jan 2022 | 36,292 | 18,093 | 37,861 | 92,246 |
Additions | 4,309 | 500 | 580 | 5,389 |
Revaluation | (63) | — | — | (63) |
Disposals/Write offs | (45) | — | (1,986) | (2,031) |
Transfers (refer to Note 28) | (609) | — | (175) | (784) |
At 31 Dec 2022 | 39,884 | 18,593 | 36,280 | 94,757 |
Accumulated depreciation and impairment losses | ||||
At 1 Jan 2022 | 1,870 | 16,677 | 31,776 | 50,323 |
Depreciation charge for the year | 274 | 488 | 1,553 | 2,315 |
Revaluation | (248) | — | — | (248) |
Disposals/Write offs | (45) | — | (1,985) | (2,030) |
Transfers (refer to Note 28) | (59) | — | (171) | (230) |
At 31 Dec 2022 | 1,792 | 17,165 | 31,173 | 50,130 |
Carrying amount at 1 Jan 2022 | 34,422 | 1,416 | 6,085 | 41,923 |
Carrying amount at 31 Dec 2022 | 38,092 | 1,428 | 5,107 | 44,627 |
164 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Bank | ||||
Land and buildings | Computer equipment | Others | Total | |
€000 | €000 | €000 | €000 | |
Cost/revaluation | ||||
At 1 Jan 2023 | 39,884 | 18,355 | 36,069 | 94,308 |
Additions | 8,126 | 427 | 570 | 9,123 |
Revaluation | 1,808 | — | — | 1,808 |
Disposals/Write offs | (214) | (3,031) | (252) | (3,497) |
Transfers (refer to Note 28) | (1,210) | — | (10) | (1,220) |
At 31 Dece 2023 | 48,394 | 15,751 | 36,377 | 100,522 |
Accumulated depreciation and impairment losses | ||||
At 1 Jan 2023 | 1,792 | 16,927 | 30,966 | 49,685 |
Depreciation charge for the year | 257 | 502 | 1,271 | 2,030 |
Revaluation | (18) | — | — | (18) |
Disposals/Write offs | (214) | (2,947) | (244) | (3,405) |
Transfers (refer to Note 28) | (48) | — | (9) | (57) |
Impairment losses | 503 | — | 93 | 596 |
At 31 Dec 2023 | 2,272 | 14,482 | 32,077 | 48,831 |
Carrying amount at 1 Jan 2023 | 38,092 | 1,428 | 5,103 | 44,623 |
Carrying amount at 31 Dec 2023 | 46,122 | 1,269 | 4,300 | 51,691 |
Cost/revaluation | ||||
At 1 Jan 2022 | 36,292 | 17,855 | 37,652 | 91,799 |
Additions | 4,309 | 500 | 578 | 5,387 |
Revaluation | (63) | — | — | (63) |
Disposals/Write offs | (45) | — | (1,986) | (2,031) |
Transfers (refer to Note 28) | (609) | — | (175) | (784) |
At 31 Dec 2022 | 39,884 | 18,355 | 36,069 | 94,308 |
Accumulated depreciation and impairment losses | ||||
At 1 Jan 2022 | 1,870 | 16,439 | 31,569 | 49,878 |
Depreciation charge for the year | 274 | 488 | 1,553 | 2,315 |
Revaluation | (248) | — | — | (248) |
Disposals/Write offs | (45) | — | (1,985) | (2,030) |
Transfers (refer to Note 28) | (59) | — | (171) | (230) |
At 31 Dec 2022 | 1,792 | 16,927 | 30,966 | 49,685 |
Carrying amount at 1 Jan 2022 | 34,422 | 1,416 | 6,083 | 41,921 |
Carrying amount at 31 Dec 2022 | 38,092 | 1,428 | 5,103 | 44,623 |
Group/Bank | ||
2023 | 2022 | |
€000 | €000 | |
At 31 Dec | ||
Cost | 19,739 | 11,827 |
Accumulated depreciation | (2,290) | (2,040) |
Carrying amount | 17,449 | 9,787 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 165 |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Software | 20,762 | 19,169 | 20,356 | 18,604 |
20,762 | 19,169 | 20,356 | 18,604 | |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
Cost | €000 | €000 | €000 | €000 |
At 1 Jan | 59,909 | 52,490 | 57,577 | 50,238 |
Additions | 6,880 | 7,419 | 6,822 | 7,339 |
Write offs | (43) | — | (43) | — |
At 31 Dec | 66,746 | 59,909 | 64,356 | 57,577 |
Accumulated amortisation | ||||
At 1 Jan | 40,740 | 35,887 | 38,973 | 34,216 |
Amortisation and impairment charge for the year | 5,244 | 4,853 | 5,027 | 4,757 |
At 31 December | 45,984 | 40,740 | 44,000 | 38,973 |
Carrying amount at 1 Jan | 19,169 | 16,603 | 18,604 | 16,022 |
Carrying amount at 31 Dec | 20,762 | 19,169 | 20,356 | 18,604 |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Deferred tax assets | 31,002 | 35,767 | 30,623 | 35,620 |
Deferred tax liabilities | (3,727) | (3,569) | (3,727) | (3,569) |
27,275 | 32,198 | 26,896 | 32,051 | |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Depreciation of property, plant and equipment | (2,440) | (2,164) | (2,422) | (2,140) |
Expected credit loss allowances | 18,049 | 19,151 | 18,049 | 19,151 |
Fair valuation of properties | (3,727) | (3,569) | (3,727) | (3,569) |
Fair value of financial instruments | 7,401 | 12,086 | 7,401 | 12,086 |
Impact of IFRS 17 transition | — | (324) | — | — |
Provisions | 7,186 | 6,565 | 6,790 | 6,128 |
Right-of-use assets | (799) | (861) | (799) | (861) |
Lease liabilities | 798 | 849 | 798 | 849 |
Other | 807 | 465 | 806 | 407 |
27,275 | 32,198 | 26,896 | 32,051 | |
166 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Group | |||||
At 1 Jan 2023 | Recognised in profit or loss | Recognised in OCI | Recognised directly in equity | At 31 Dec 2023 | |
€000 | €000 | €000 | €000 | €000 | |
Depreciation of property, plant and equipment | (2,164) | (276) | — | — | (2,440) |
Expected credit loss allowances | 19,151 | (1,102) | — | — | 18,049 |
Fair valuation of properties | (3,569) | 25 | (183) | — | (3,727) |
Fair value movements on financial instruments | 12,086 | — | (4,685) | — | 7,401 |
Impact of IFRS 17 transition | (324) | 324 | — | — | — |
Provisions | 6,565 | 613 | 8 | — | 7,186 |
Right-of-use assets | (861) | 62 | — | — | (799) |
Lease liabilities | 849 | (51) | — | — | 798 |
Other | 465 | 284 | — | 58 | 807 |
32,198 | (121) | (4,860) | 58 | 27,275 | |
At 1 Jan 2022 | Recognised in profit or loss | Recognised in OCI | Recognised directly in equity | At 31 Dec 2022 | |
€000 | €000 | €000 | €000 | €000 | |
Depreciation of property, plant and equipment | (1,653) | (511) | — | — | (2,164) |
Expected credit loss allowances | 24,176 | (5,025) | — | — | 19,151 |
Fair valuation of properties | (3,722) | 172 | (19) | — | (3,569) |
Fair value movements on financial instruments | (393) | — | 12,479 | — | 12,086 |
Impact of IFRS 17 transition | 375 | (699) | — | — | (324) |
Provisions | 6,994 | 52 | (481) | — | 6,565 |
Right-of-use assets | (899) | 38 | — | — | (861) |
Lease liabilities | 858 | (9) | — | — | 849 |
Other | 501 | (96) | — | 60 | 465 |
26,237 | (6,078) | 11,979 | 60 | 32,198 | |
Bank | |||||
At 1 Jan 2023 | Recognised in profit or loss | Recognised in OCI | Recognised directly in equity | At 31 Dec 2023 | |
€000 | €000 | €000 | €000 | €000 | |
Depreciation of property, plant and equipment | (2,140) | (282) | — | — | (2,422) |
Expected credit loss allowances | 19,151 | (1,102) | — | — | 18,049 |
Fair valuation of properties | (3,569) | 25 | (183) | — | (3,727) |
Fair value movements on financial instruments | 12,086 | — | (4,685) | — | 7,401 |
Provisions | 6,128 | 654 | 8 | — | 6,790 |
Right-of-use assets | (861) | 62 | — | — | (799) |
Lease liabilities | 849 | (51) | — | — | 798 |
Other | 407 | 341 | — | 58 | 806 |
32,051 | (353) | (4,860) | 58 | 26,896 | |
At 1 Jan 2022 | Recognised in profit or loss | Recognised in OCI | Recognised directly in equity | At 31 Dec 2022 | |
€000 | €000 | €000 | €000 | €000 | |
Depreciation of property, plant and equipment | (1,658) | (482) | — | — | (2,140) |
Expected credit loss allowances | 24,176 | (5,025) | — | — | 19,151 |
Fair valuation of properties | (3,722) | 172 | (19) | — | (3,569) |
Fair value movements on financial instruments | (393) | — | 12,479 | — | 12,086 |
Provisions | 6,599 | 10 | (481) | — | 6,128 |
Right-of-use assets | (899) | 38 | — | — | (861) |
Lease liabilities | 858 | (9) | — | — | 849 |
Other | 436 | (89) | — | 60 | 407 |
25,397 | (5,385) | 11,979 | 60 | 32,051 | |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 167 |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Term deposits | 764,735 | 694,071 | 764,735 | 694,071 |
Repayable on demand | 5,376,785 | 5,276,887 | 5,407,534 | 5,316,321 |
6,141,520 | 5,970,958 | 6,172,269 | 6,010,392 | |
Group | ||
2023 | 2022 | |
€000 | €000 | |
At 1 Jan | 162,123 | 185,137 |
Premiums received | 2,109 | 6,141 |
Amounts paid on surrender and other terminations during the year | (18,420) | (12,064) |
Changes in unit prices and other movements | 11,146 | (17,091) |
At 31 Dec | 156,958 | 162,123 |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Accrued interest | 4,976 | 1,864 | 4,771 | 1,677 |
Accrued expenses | 34,007 | 25,163 | 28,697 | 20,444 |
Deferred income | 247 | 273 | 134 | 158 |
Committed letters of credit | 240 | 1,500 | 240 | 1,500 |
Lease liabilities (refer to Note 31) | 2,280 | 2,426 | 2,280 | 2,426 |
Other | 13,305 | 11,324 | 8,639 | 7,141 |
55,055 | 42,550 | 44,761 | 33,346 | |
Group | |||||
Termination benefits | Litigation provision | Post employment and other long-term employee benefits | Other provisions | Total | |
€000 | €000 | €000 | €000 | €000 | |
Provisions (excluding contractual commitments) | |||||
At 31 Dec 2022 | 1,786 | 2,108 | 11,819 | 2,623 | 18,336 |
Additions | 950 | 1,104 | 975 | 294 | 3,323 |
Amounts utilised | (1,666) | (629) | (125) | (183) | (2,603) |
Unused amounts reversed | (128) | (626) | (9) | (256) | (1,019) |
Remeasurement of post employment and other long-term employee benefits | — | — | 1,969 | — | 1,969 |
At 31 Dec 2023 | 942 | 1,957 | 14,629 | 2,478 | 20,006 |
Loan commitments and financial guarantees | Performance and other guarantees | Total | |||
€000 | €000 | €000 | |||
Provisions in respect of contractual commitments | |||||
At 31 Dec 2022 | 1,322 | 422 | 1,744 | ||
Movement during the year | (4) | 103 | 99 | ||
At 31 Dec 2023 | 1,318 | 525 | 1,843 | ||
Total Provisions | |||||
At 31 Dec 2022 | 20,080 | ||||
At 31 Dec 2023 | 21,849 | ||||
168 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Group | |||||
Termination benefits | Litigation provision | Post employment and other long- term employee benefits | Other provisions | Total | |
€000 | €000 | €000 | €000 | €000 | |
Provisions (excluding contractual commitments) | |||||
At 31 Dec 2021 | 2,042 | 1,207 | 13,293 | 2,940 | 19,482 |
Additions | 1,558 | 963 | 729 | 623 | 3,873 |
Amounts utilised | (1,814) | (2) | (376) | (754) | (2,946) |
Unused amounts reversed | — | (60) | (305) | (186) | (551) |
Remeasurement of post employment and other long-term employee benefits | — | — | (1,522) | — | (1,522) |
At 31 Dec 2022 | 1,786 | 2,108 | 11,819 | 2,623 | 18,336 |
Loan commitments and financial guarantees | Performance and other guarantees | Total | |||
€000 | €000 | €000 | |||
Provisions in respect of contractual commitments | |||||
At 31 Dec 2021 | 1,266 | 504 | 1,770 | ||
Movement during the year | 56 | (82) | (26) | ||
At 31 Dec 2022 | 1,322 | 422 | 1,744 | ||
Total Provisions | |||||
At 31 Dec 2021 | 21,252 | ||||
At 31 Dec 2022 | 20,080 | ||||
Bank | |||||
Termination benefits | Litigation provision | Post employment and other long- term employee benefits | Other provisions | Total | |
€000 | €000 | €000 | €000 | €000 | |
Provisions (excluding contractual commitments) | |||||
At 31 Dec 2022 | 1,786 | 1,988 | 11,819 | 1,493 | 17,086 |
Additions | 950 | 1,104 | 975 | 294 | 3,323 |
Amounts utilised | (1,666) | (629) | (125) | (183) | (2,603) |
Unused amounts reversed | (128) | (506) | (9) | (256) | (899) |
Remeasurement of post employment and other long-term employee benefits | — | — | 1,969 | — | 1,969 |
At 31 Dec 2023 | 942 | 1,957 | 14,629 | 1,348 | 18,876 |
Loan commitments and financial guarantees | Performance and other guarantees | Total | |||
€000 | €000 | €000 | |||
Provisions in respect of contractual commitments | |||||
At 31 Dec 2022 | 1,322 | 422 | 1,744 | ||
Movement during the year | (4) | 103 | 99 | ||
At 31 Dec 2023 | 1,318 | 525 | 1,843 | ||
Total Provisions | |||||
At 31 Dec 2022 | 18,830 | ||||
At 31 Dec 2023 | 20,719 | ||||
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 169 |
Bank | |||||
Termination benefits | Litigation provision | Post employment and other long- term employee benefits | Other provisions | Total | |
€000 | €000 | €000 | €000 | €000 | |
Provisions (excluding contractual commitments) | |||||
At 31 Dec 2021 | 2,042 | 1,207 | 13,293 | 1,810 | 18,352 |
Additions | 1,558 | 843 | 729 | 623 | 3,753 |
Amounts utilised | (1,814) | (2) | (376) | (754) | (2,946) |
Unused amounts reversed | — | (60) | (305) | (186) | (551) |
Remeasurement of post employment and other long-term employee benefits | — | — | (1,522) | — | (1,522) |
At 31 Dec 2022 | 1,786 | 1,988 | 11,819 | 1,493 | 17,086 |
Loan commitments and financial guarantees | Performance and other guarantees | Total | |||
€000 | €000 | €000 | |||
Provisions in respect of contractual commitments | |||||
At 31 Dec 2021 | 1,266 | 504 | 1,770 | ||
Movement during the year | 56 | (82) | (26) | ||
At 31 Dec 2022 | 1,322 | 422 | 1,744 | ||
Total Provisions | |||||
At 31 Dec 2021 | 20,122 | ||||
At 31 Dec 2022 | 18,830 | ||||
170 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 171 |
Group/Bank | ||
2023 | 2022 | |
€000 | €000 | |
Authorised | ||
470,000,000 ordinary shares of 30 cent each | 141,000 | 141,000 |
Issued and fully paid up | ||
360,306,099 ordinary shares of 30 cent each | 108,092 | 108,092 |
Group/Bank | |
€000 | |
On land and buildings | |
1 Jan 2022 | 23,599 |
– surplus arising on revaluation | 185 |
– deferred tax on revaluation loss | (19) |
– transfer to retained earnings upon realisation through disposal | (1,396) |
– deferred tax on transfer upon realisation through disposal | 140 |
31 Dec 2022 | 22,509 |
– surplus arising on revaluation | 1,826 |
– deferred tax on revaluation surplus | (183) |
31 Dec 2023 | 24,152 |
On financial investments | |
1 Jan 2022 | 731 |
– fair value adjustments | (35,655) |
– deferred tax on fair value adjustments | 12,479 |
31 Dec 2022 | (22,445) |
– fair value adjustments | 13,386 |
– deferred tax on fair value adjustments | (4,685) |
31 Dec 2023 | (13,744) |
Total revaluation reserve | |
Total at 31 Dec 2022 | 64 |
Total at 31 Dec 2023 | 10,408 |
Group Contract amount | Bank Contract amount | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Guarantees and other contingent liabilities: | ||||
– financial guarantees | 10,279 | 11,787 | 10,279 | 11,787 |
– performance and other guarantees | 156,601 | 137,399 | 156,601 | 137,399 |
– standby letters of credit | 17,689 | 18,130 | 17,689 | 18,130 |
– other contingent liabilities | 15,926 | 14,934 | 15,876 | 14,934 |
At 31 Dec | 200,495 | 182,250 | 200,445 | 182,250 |
Commitments: | ||||
– documentary credits | 6,216 | 17,816 | 6,216 | 17,816 |
– standby facilities, credit lines and other commitments to lend | 832,443 | 824,504 | 832,443 | 824,504 |
At 31 Dec | 838,659 | 842,320 | 838,659 | 842,320 |
172 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Balances of cash and cash equivalents are analysed below: | ||||
Cash | 33,582 | 29,500 | 33,582 | 29,500 |
Malta Government Treasury Bills of three months or less | — | 232,346 | — | 232,346 |
Balances with Central Bank of Malta (excluding reserve deposit) of three months or less | 1,199,750 | 1,209,987 | 1,199,750 | 1,209,987 |
Loans and advances to banks of one month or less | 602,291 | 481,646 | 597,940 | 475,370 |
Items in course of collection from other banks | 8,427 | 6,921 | 8,427 | 6,921 |
Less: Items in course of transmission to other banks | (18,359) | (27,397) | (18,359) | (27,397) |
Per Statements of Cash Flows | 1,825,691 | 1,933,003 | 1,821,340 | 1,926,727 |
Adjustment to reflect balances with contractual maturity of more than one or three months as applicable | 561,599 | 362,361 | 561,507 | 362,361 |
Per Statements of Financial Position | 2,387,290 | 2,295,364 | 2,382,847 | 2,289,088 |
Analysed as follows: | ||||
Cash and balances with Central Bank of Malta | 1,291,059 | 1,298,853 | 1,291,059 | 1,298,853 |
Malta Government Treasury Bills | 385,580 | 284,494 | 385,580 | 284,494 |
Loans and advances to banks | 720,583 | 732,493 | 716,140 | 726,217 |
Items in course of collection from other banks | 8,427 | 6,921 | 8,427 | 6,921 |
Items in course of transmission to other banks | (18,359) | (27,397) | (18,359) | (27,397) |
2,387,290 | 2,295,364 | 2,382,847 | 2,289,088 | |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 173 |
174 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Group | ||||
2023 | ||||
Wealth and Personal Banking | Commercial Banking | Global Markets | Group Total | |
€000 | €000 | €000 | €000 | |
Net interest income | 143,027 | 52,785 | — | 195,812 |
– external | 127,887 | 67,925 | — | 195,812 |
– internal | 15,140 | (15,140) | — | — |
Net non-interest income | 12,063 | 11,376 | 3,615 | 27,054 |
Insurance service result | 5,030 | — | — | 5,030 |
Net income/(expense) from assets and liabilities of insurance businesses, measured at fair value | 48,068 | — | — | 48,068 |
Insurance finance (expense)/income | (44,294) | — | — | (44,294) |
Net operating income before loan impairment charges | 163,894 | 64,161 | 3,615 | 231,670 |
Change in expected credit losses and other credit impairment charges | 1,308 | 3,272 | — | 4,580 |
Net operating income | 165,202 | 67,433 | 3,615 | 236,250 |
Employee compensation and benefits | (32,390) | (9,716) | (501) | (42,607) |
General and administrative expenses | (38,447) | (12,593) | (337) | (51,377) |
Depreciation and impairment of property, plant and equipment and right-of-use assets | (2,708) | (451) | (9) | (3,168) |
Amortisation and impairment of intangible assets | (3,846) | (1,372) | (26) | (5,244) |
Total operating expenses | (77,391) | (24,132) | (873) | (102,396) |
Reported/Adjusted profit before tax | 87,811 | 43,301 | 2,742 | 133,854 |
Reported balance sheet data | ||||
Loans and advances to customers (net) | 2,192,535 | 891,308 | — | 3,083,843 |
Financial assets mandatorily measured at fair value through profit or loss | 693,024 | — | — | 693,024 |
Total external assets | 5,701,093 | 1,945,396 | 14,430 | 7,660,919 |
Customer accounts | 4,518,941 | 1,622,579 | — | 6,141,520 |
Liabilities under investment contracts | 156,958 | — | — | 156,958 |
Insurance contract liabilities | 519,363 | — | — | 519,363 |
20221 | ||||
Wealth and Personal Banking | Commercial Banking | Global Markets | Group Total | |
€000 | €000 | €000 | €000 | |
Net interest income | 75,821 | 32,421 | — | 108,242 |
– external | 75,894 | 32,348 | — | 108,242 |
– internal | (73) | 73 | — | — |
Net non-interest income | 13,440 | 13,286 | 3,799 | 30,525 |
Insurance service result | 5,278 | — | — | 5,278 |
Net income/(expense) from assets and liabilities of insurance businesses, measured at fair value | (74,744) | — | — | (74,744) |
Insurance finance (expense)/income | 76,496 | — | — | 76,496 |
Net operating income before loan impairment charges | 96,291 | 45,707 | 3,799 | 145,797 |
Change in expected credit losses and other credit impairment charges | (2,691) | 12,252 | — | 9,561 |
Net operating income | 93,600 | 57,959 | 3,799 | 155,358 |
Employee compensation and benefits | (28,642) | (8,336) | (416) | (37,394) |
General and administrative expenses | (39,694) | (12,607) | (363) | (52,664) |
Depreciation and impairment of property, plant and equipment and right-of-use assets | (2,635) | (654) | (12) | (3,301) |
Amortisation and impairment of intangible assets | (3,465) | (1,364) | (24) | (4,853) |
Total operating expenses | (74,436) | (22,961) | (815) | (98,212) |
Adjusted profit before tax | 19,164 | 34,998 | 2,984 | 57,146 |
Reported balance sheet data | ||||
Loans and advances to customers (net) | 2,264,031 | 911,136 | — | 3,175,167 |
Financial assets mandatorily measured at fair value through profit or loss | 660,446 | — | — | 660,446 |
Total external assets | 5,649,610 | 1,660,474 | 26,562 | 7,336,646 |
Customer accounts | 4,545,286 | 1,425,672 | — | 5,970,958 |
Liabilities under investment contracts | 162,123 | — | — | 162,123 |
Insurance contract liabilities | 499,507 | — | — | 499,507 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 175 |
Group | ||||
2022 | ||||
Wealth and Personal Banking | Commercial Banking | Global Markets | Group Total | |
€000 | €000 | €000 | €000 | |
Adjusted profit before tax | 19,173 | 34,989 | 2,984 | 57,146 |
Significant item: | ||||
– Restructuring provision | (1,288) | (252) | (18) | (1,558) |
Reported profit before tax | 17,885 | 34,737 | 2,966 | 55,588 |
Group/Bank | ||||
Highest balance during the year | Balance at end of year | Highest balance during the year | Balance at end of year | |
2023 | 2023 | 2022 | 2022 | |
€000 | €000 | €000 | €000 | |
Loans and advances to customers | 2,411 | 2,411 | 2,131 | 2,131 |
Commitments to lend | 1,040 | 612 | 854 | 563 |
Deposits | 2,660 | 2,256 | 3,647 | 3,072 |
176 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Directors’ emoluments (including Non-Executive Directors) | ||||
Salaries and other emoluments | 1,844 | 2,033 | 1,223 | 1,271 |
Benefits | 107 | 124 | 98 | 117 |
Share-based payments | 43 | 32 | 43 | 32 |
1,994 | 2,189 | 1,364 | 1,420 | |
Other key management personnel | ||||
Salaries and other emoluments | 1,674 | 742 | 1,674 | 742 |
Benefits | 67 | 56 | 67 | 56 |
Share-based payments | 24 | 8 | 24 | 8 |
1,765 | 806 | 1,765 | 806 | |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Assets | ||||
Derivatives | 10,386 | 20,161 | 10,386 | 20,161 |
Loans and advances to banks | 712,524 | 659,843 | 709,320 | 659,843 |
Prepayments, accrued income and other assets | 1,520 | 921 | 1,520 | 921 |
Liabilities | ||||
Deposits by banks | 3,853 | — | 3,853 | — |
Borrowings from group undertaking | 90,000 | — | 90,000 | — |
Subordinated liabilities | 65,000 | — | 65,000 | — |
Accruals, deferred income and other liabilities | 1,066 | 438 | 1,066 | 438 |
Income statement | ||||
Interest income | 28,082 | 6,126 | 28,082 | 6,126 |
Interest expense | 1,617 | 230 | 1,617 | 230 |
Fee income | 55 | 112 | 55 | 112 |
Fee expense | 148 | 78 | 144 | 84 |
Net trading income | (886) | 9,006 | (886) | 9,006 |
Other income | 25 | 24 | 25 | 24 |
General and administrative expenses | 680 | 696 | 680 | 696 |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Assets | ||||
Derivatives | 2,664 | 3,925 | 2,664 | 3,925 |
Loans and advances to banks | 2,353 | 53,322 | 1,133 | 51,494 |
Prepayments, accrued income and other assets | 502 | 189 | 409 | 189 |
Liabilities | ||||
Derivatives | 446 | 1,587 | 446 | 1,587 |
Deposits by banks | 712 | 1,074 | 712 | 1,074 |
Borrowings from a group undertaking | — | 60,000 | — | 60,000 |
Subordinated liabilities | — | 62,000 | — | 62,000 |
Accruals, deferred income and other liabilities | 667 | 1,157 | 69 | 219 |
Income statement | ||||
Interest income | 1,062 | 343 | 1,062 | 343 |
Interest expense | 5,600 | 2,048 | 5,600 | 2,048 |
Fee income | 378 | — | — | — |
Fee expense | 32 | 2 | 32 | 2 |
Net trading income | (6) | 15,664 | (6) | 15,664 |
Other income | 98 | 22 | 98 | 22 |
General and administrative expenses | 922 | 485 | 363 | 41 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 177 |
Group | Bank | |||
2023 | 2022 | 2023 | 2022 | |
€000 | €000 | €000 | €000 | |
Assets | ||||
Loans and advances to banks | 15,406 | 4,688 | 13,717 | |
Prepayments, accrued income and other assets | 358 | 1,076 | 311 | 911 |
Liabilities | ||||
Deposits by banks | 51 | 469 | 51 | 469 |
Customer accounts | 2,743 | 3,266 | 2,743 | 3,266 |
Accruals, deferred income and other liabilities | 17,532 | 10,468 | 16,351 | 8,116 |
Income statement | ||||
Interest income | 249 | 566 | 249 | 566 |
Interest expense | 1 | 5 | 1 | 5 |
Fee income | 938 | 1,504 | — | — |
Fee expense | 153 | 154 | 7 | 5 |
Net trading income | 4 | 2 | 4 | 2 |
Other income | 373 | 266 | 373 | 266 |
General and administrative expenses | 28,272 | 27,347 | 27,384 | 25,859 |
Bank | ||
2023 | 2022 | |
€000 | €000 | |
Assets | ||
Prepayments, accrued income and other assets | 1,399 | 1,087 |
Investment in subsidiaries | 30,859 | 30,859 |
Liabilities | ||
Customer accounts | 30,749 | 39,434 |
Income statement | ||
Fee income | 2,311 | 3,584 |
Net trading income | 12 | 14 |
Dividend income | 769 | 1,308 |
Reported Group numbers | IFRS 17 Restatement | Reclassif- ication | Restated Group numbers | Total movements | ||
€000 | €000 | €000 | €000 | €000 | €000 | |
Assets | ||||||
Financial assets mandatorily measured at fair value through profit or loss | 767,808 | — | — | — | 767,808 | — |
Loans and advances to banks | 619,273 | — | — | — | 619,273 | — |
Loans and advances to customers | 3,196,725 | — | — | — | 3,196,725 | — |
Financial investments | 845,735 | — | — | — | 845,735 | — |
Intangible assets | 50,168 | (33,565) | — | — | 16,603 | (33,565) |
Deferred tax assets | 29,119 | — | — | 767 | 29,886 | 767 |
Reinsurance contract assets | 77,972 | — | (77,707) | (202) | 63 | (77,909) |
All other assets | 1,588,005 | — | 77 | 1,263 | 1,589,345 | 1,340 |
Total assets | 7,174,805 | (33,565) | (77,630) | 1,828 | 7,065,438 | (109,367) |
Liabilities and equity | ||||||
Liabilities | ||||||
Insurance contract liabilities | 658,197 | — | (76,635) | 811 | 582,373 | (75,824) |
Deferred tax liabilities | 15,005 | — | (12,123) | 767 | 3,649 | (11,356) |
All other liabilities | 6,011,866 | — | — | 250 | 6,012,116 | 250 |
Total liabilities | 6,685,068 | — | (88,758) | 1,828 | 6,598,138 | (86,930) |
Total equity | 489,737 | (33,565) | 11,128 | — | 467,300 | (22,437) |
Total liabilities and equity | 7,174,805 | (33,565) | (77,630) | 1,828 | 7,065,438 | (109,367) |
178 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
Reported Group numbers | Removal of PVIF and IFRS 4-based revenue | Effect of IFRS 17 | Restated Group numbers | |
€000 | €000 | €000 | €000 | |
Net interest income | 108,242 | — | — | 108,242 |
Net fee income | 22,054 | — | (400) | 21,654 |
Net insurance premium income | 50,691 | (50,691) | — | — |
Insurance revenue | — | — | 15,565 | 15,565 |
Insurance service expense | — | — | (5,475) | (5,475) |
Net expenses from reinsurance contracts | — | — | (4,812) | (4,812) |
Insurance service result | — | — | 5,278 | 5,278 |
Net expense from assets and liabilities of insurance businesses, measured at fair value through profit or loss | (76,000) | — | 1,256 | (74,744) |
Insurance finance income | — | — | 76,496 | 76,496 |
Net trading income | 7,689 | — | — | 7,689 |
Other operating income | 4,292 | (2,775) | (335) | 1,182 |
Total operating income | 116,968 | (53,466) | 82,295 | 145,797 |
Net insurance claims and benefits paid and movement in liabilities to policyholders | 33,677 | (33,677) | — | — |
Net operating income before change in expected credit losses and other credit impairment charges | 150,645 | (87,143) | 82,295 | 145,797 |
Change in expected credit losses and other credit impairment charges | 9,561 | — | — | 9,561 |
Net operating income | 160,206 | (87,143) | 82,295 | 155,358 |
Employee compensation and benefits | (40,103) | — | 1,151 | (38,952) |
General and administrative expenses | (54,698) | — | 2,034 | (52,664) |
Depreciation of property, plant and equipment and right-of-use assets | (3,301) | — | — | (3,301) |
Amortisation and impairment of intangible assets | (4,853) | — | — | (4,853) |
Total operating expenses | (102,955) | — | 3,185 | (99,770) |
Profit before tax | 57,251 | (87,143) | 85,480 | 55,588 |
Tax charge | (19,680) | — | 274 | (19,406) |
Profit for the period | 37,571 | (87,143) | 85,754 | 36,182 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 179 |
Type of structured entity | Nature and purpose | Interest held by the group |
Investment funds | – These vehicles are financed through the issue of units to investors. | – Investments in units issued by the fund |
– To generate fees from managing assets on behalf of third party investors. | – Management fees |
2023 | 2022 | |
€000 | €000 | |
Carrying amount of units in HSBC managed investment funds - classified as financial investments measured at fair value through profit or loss | 90,166 | 82,543 |
Total assets of HSBC managed funds | 312,342 | 301,919 |
Registered office and ultimate parent company |
Investor compensation scheme |
180 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 181 |
182 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
2023 | 2022 | |
Rate 10Y (%) | 2.39 | 3.09 |
Rate 20Y (%) | 2.41 | 2.76 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 183 |
At 31 Dec 2023 | ||
Class of business | Renewal expense (p.a.) | Mortality |
Life direct participating and investment DPF | €34.8 | 85% TM08 / 85% TF08 |
Life other | €34.8 | 85% TM08 / 85% TF08 |
At 31 Dec 2022 | ||
Class of business | Renewal expense (p.a.) | Mortality |
Life direct participating and investment DPF | €23.7 | 85% TM08 / 85% TF08 |
Life other | €23.7 | 85% TM08 / 85% TF08 |
184 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
2023 | 2022 | 2021 | 2020 | 2019 | |
€000 | €000 | €000 | €000 | €000 | |
Interest receivable and similar income | 213,876 | 116,639 | 105,710 | 113,598 | 120,573 |
Interest expense | (18,064) | (8,397) | (7,952) | (7,696) | (10,462) |
Net interest income | 195,812 | 108,242 | 97,758 | 105,902 | 110,111 |
Net non-interest income | 35,858 | 37,555 | 33,535 | 27,521 | 41,672 |
Change in expected credit losses and other credit impairment charges | 4,580 | 9,561 | 995 | (25,589) | (389) |
Operating expenses | (102,396) | (99,770) | (105,406) | (97,391) | (120,685) |
Profit before tax | 133,854 | 55,588 | 26,882 | 10,443 | 30,709 |
Tax expense | (47,098) | (19,406) | (9,127) | (2,871) | (10,541) |
Profit for the year | 86,756 | 36,182 | 17,755 | 7,572 | 20,168 |
Earnings per share | €0.24 | €0.10 | €0.05 | €0.02 | €0.06 |
2023 | 2022 | 2021 | 2020 | 2019 | |
€000 | €000 | €000 | €000 | €000 | |
Profit for the year | 86,756 | 36,182 | 17,755 | 7,572 | 20,168 |
Other comprehensive income | |||||
Items that will be reclassified subsequently to profit or loss when specific conditions are met: | |||||
Debt instruments measured at fair value through other comprehensive income/ available-for-sale investments: | 8,697 | (23,177) | (6,095) | 753 | 311 |
– fair value (losses)/gains | 13,380 | (35,657) | (9,377) | 1,159 | 478 |
– income taxes | (4,683) | 12,480 | 3,282 | (406) | (167) |
Items that will not be reclassified subsequently to profit or loss: | |||||
Properties: | 1,643 | 166 | 2,150 | 304 | (475) |
– surplus/(loss) arising on revaluation | 1,826 | 185 | 2,389 | 338 | (528) |
– income taxes | (183) | (19) | (239) | (34) | 53 |
Post employment benefit obligations: | (14) | 893 | 292 | (446) | (619) |
– remeasurement of post employment benefit obligations | (22) | 1,374 | 450 | (686) | (952) |
– income taxes | 8 | (481) | (158) | 240 | 333 |
Equity instruments designated at fair value through other comprehensive income: | 4 | 1 | 1 | 2 | — |
– fair value gains | 6 | 2 | 2 | 3 | — |
– income taxes | (2) | (1) | (1) | (1) | — |
Other comprehensive income, net of tax | 10,330 | (22,117) | (3,652) | 613 | (783) |
Total comprehensive income | 97,086 | 14,065 | 14,103 | 8,185 | 19,385 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 185 |
2023 | 2022 | 2021 | 2020 | 2019 | |
€000 | €000 | €000 | €000 | €000 | |
Assets | |||||
Balances with Central Bank of Malta, Treasury Bills and cash | 1,676,639 | 1,583,348 | 1,495,135 | 995,627 | 585,176 |
Items in course of collection from other banks | 8,427 | 6,921 | 4,453 | 4,959 | 3,436 |
Financial assets mandatorily measured at fair value through profit or loss | 693,024 | 660,446 | 767,808 | 733,670 | 754,020 |
Derivatives | 13,577 | 25,745 | 4,640 | 6,574 | 5,320 |
Loans and advances to banks | 720,583 | 732,507 | 619,273 | 589,259 | 676,031 |
Loans and advances to customers | 3,083,843 | 3,175,167 | 3,196,725 | 3,264,664 | 3,257,433 |
Financial investments | 1,315,859 | 1,004,770 | 845,735 | 877,485 | 943,603 |
Prepayments, accrued income and other assets | 33,699 | 34,092 | 28,683 | 35,928 | 37,691 |
Current tax assets | 1,153 | 3,496 | 3,669 | 1,813 | 1,719 |
Reinsurance contract assets | 2,557 | 2,959 | 63 | 80,083 | 78,945 |
Non-current assets held for sale | 5,816 | 5,173 | 6,673 | 8,919 | 8,422 |
Investment property | — | — | 1,600 | 1,600 | 9,788 |
Right-of-use assets | 2,284 | 2,459 | 2,569 | 4,200 | 4,685 |
Property, plant and equipment | 51,694 | 44,627 | 41,923 | 44,206 | 47,403 |
Intangible assets | 20,762 | 19,169 | 16,603 | 54,342 | 61,518 |
Deferred tax assets | 31,002 | 35,767 | 29,886 | 27,130 | 22,427 |
Total assets | 7,660,919 | 7,336,646 | 7,065,438 | 6,730,459 | 6,497,617 |
Liabilities | |||||
Deposits by banks | 5,117 | 2,861 | 1,397 | 3,754 | 840 |
Customer accounts | 6,141,520 | 5,970,958 | 5,621,195 | 5,272,961 | 4,976,580 |
Items in the course of transmission to other banks | 18,359 | 27,397 | 21,573 | 21,372 | 23,473 |
Liabilities under investment contracts | 156,958 | 162,123 | 185,137 | 170,865 | 183,706 |
Derivatives | 5,748 | 10,252 | 4,592 | 6,551 | 5,190 |
Accruals, deferred income and other liabilities | 55,055 | 42,550 | 34,471 | 27,833 | 59,189 |
Current tax liabilities | 35,190 | 2,104 | 499 | 88 | 2,489 |
Insurance contract liabilities | 519,363 | 499,507 | 582,373 | 648,028 | 658,470 |
Provisions | 21,849 | 20,080 | 21,252 | 21,031 | 33,271 |
Deferred tax liabilities | 3,727 | 3,569 | 3,649 | 17,562 | 22,443 |
Borrowings from a group undertaking | 90,000 | 60,000 | 60,000 | — | — |
Subordinated liabilities | 65,000 | 62,000 | 62,000 | 62,000 | 62,000 |
Total liabilities | 7,117,886 | 6,863,401 | 6,598,138 | 6,252,045 | 6,027,651 |
Total equity | 543,033 | 473,245 | 467,300 | 478,414 | 469,966 |
Total liabilities and equity | 7,660,919 | 7,336,646 | 7,065,438 | 6,730,459 | 6,497,617 |
Memorandum items | |||||
Guarantees and other contingent liabilities | 200,495 | 182,250 | 164,388 | 174,355 | 181,491 |
Commitments | 838,659 | 842,320 | 967,739 | 1,071,319 | 1,075,524 |
186 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
2023 | 2022 | 2021 | 2020 | 2019 | |
€000 | €000 | €000 | €000 | €000 | |
Net cash from/(used in) operating activities | 165,291 | 618,670 | 745,603 | 158,480 | (204,056) |
Cash flows from investing activities | |||||
Dividends received | — | — | — | 33 | 29 |
Interest received from financial investments | 11,097 | 6,142 | 11,897 | 14,746 | 16,229 |
Purchase of financial investments | (568,904) | (464,793) | (221,697) | (214,787) | (315,277) |
Proceeds from sale and maturity of financial investments | 283,058 | 255,296 | 249,667 | 263,519 | 270,965 |
Purchase of property, plant and equipment, investment property and intangible assets | (16,055) | (12,808) | (8,508) | (7,677) | (6,980) |
Proceeds on sale of property, plant and equipment, investment property and intangible assets | — | 1,600 | 56 | 7,903 | 1,865 |
Net cash flows from/(used in) investing activities | (290,804) | (214,563) | 31,415 | 63,737 | (33,169) |
Cash flows from financing activities | |||||
Dividends paid | (27,190) | (8,010) | (2,717) | — | (8,197) |
Proceeds from borrowings from a group undertaking | 30,000 | 60,000 | — | — | |
Issue of subordinated liabilities | 65,000 | — | — | — | — |
Repayment of subordinated liabilities | (62,000) | — | — | — | — |
Net cash from/(used in) financing activities | 5,810 | (8,010) | 57,283 | — | (8,197) |
Net increase/(decrease) in cash and cash equivalents | (119,703) | 396,097 | 834,301 | 222,217 | (245,422) |
2023 | 2022 | 2021 | 2020 | 2019 | |
% | % | % | % | % | |
Net operating income before loan impairment charges to total assets | 3.0 | 2.0 | 1.9 | 2.0 | 2.3 |
Operating expenses to total assets | 1.3 | 1.4 | 1.5 | 1.4 | 1.9 |
Cost efficiency ratio | 44.2 | 68.4 | 80.3 | 73.0 | 80.2 |
Profit before tax to total assets | 1.7 | 0.8 | 0.4 | 0.2 | 0.5 |
Profit before tax to equity | 24.6 | 11.7 | 5.8 | 2.2 | 6.5 |
Profit after tax to equity | 17.1 | 7.7 | 3.8 | 1.6 | 4.3 |
2023 | 2022 | 2021 | 2020 | 2019 | |
Shares in issue (millions) | 360.3 | 360.3 | 360.3 | 360.3 | 360.3 |
Net assets per 30 cent share (euro) | 1.5 | 1.3 | 1.3 | 1.3 | 1.3 |
Earnings per 30 cent share (euro) | 0.24 | 0.10 | 0.05 | 0.02 | 0.06 |
Dividend per 30 cent share (euro) | |||||
– gross | 0.15 | 0.06 | 0.03 | 0.01 | 0.02 |
– net | 0.10 | 0.04 | 0.02 | 0.01 | 0.01 |
Dividend cover | 2.5 | 2.8 | 2.2 | 2.8 | 5.1 |
HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 | 187 |
188 | HSBC Bank Malta p.l.c. Annual Report and Accounts 2023 |
© Copyright HSBC Bank Malta p.l.c. 2023 All rights reserved No part of this publication may be reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical, photocopying, recording, or otherwise, without the prior written permission of HSBC Bank Malta p.l.c. Published by HSBC Bank Malta p.l.c., Valletta. Cover designed by Superunion (formerly Addison Group), London; text pages designed by Group Communications (Asia), The Hongkong and Shanghai Banking Corporation Limited, Hong Kong, and Global Finance, HSBC Holdings plc, London. ISSN 1811-7570 ISBN 978 -99932-12-23-2 |
Photography Pages 2 and 5: Jean-Marc Zerafa Pages 3,4 (top), 7 and 13: Andrew Gauci Attard Page 4 (bottom): Malta Trust Foundation Page 10: Rene Rossignaud Page 12: Claire Farrugia |
HSBC Bank Malta p.l.c. 116 Archbishop Street Valletta VLT 1444 Malta Telephone: 356 2380 2380 www.hsbc.com.mt |
Independent auditor’s report
To the Shareholders of HSBC Bank Malta p.l.c.
Report on the audit of the financial statements
Our opinion
In our opinion:
· The Consolidated financial statements and the Parent Company (“the bank”) financial statements (the “financial statements”) of HSBC Bank Malta p.l.c. give a true and fair view of the Consolidated and the Parent Company’s financial position as at 31 December 2023, and of their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards (‘IFRSs’) as adopted by the EU; and
· The financial statements have been prepared in accordance with the requirements of the Maltese Banking Act (Cap. 371) and the Maltese Companies Act (Cap. 386).
HSBC Bank Malta p.l.c.’s financial statements comprise:
· the Consolidated and Parent Company income statements and statements of comprehensive income for the year ended 31 December 2023;
· the Consolidated and Parent Company statements of financial position as at 31 December 2023;
· the Consolidated and Parent Company statements of changes in equity for the year then ended;
· the Consolidated and Parent Company statements of cash flows for the year then ended; and
· the notes to the financial statements, comprising material accounting policy information and other explanatory information.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
We are independent of the bank and its subsidiaries in accordance with the International Code of Ethics for Professional Accountants (including International Independence Standards) issued by the International Ethics Standards Board for Accountants (IESBA Code) together with the ethical requirements of the Accountancy Profession (Code of Ethics for Warrant Holders) Directive issued in terms of the Accountancy Profession Act (Cap. 281) that are relevant to our audit of the financial statements in Malta. We have fulfilled our other ethical responsibilities in accordance with these Codes.
To the best of our knowledge and belief, we declare that non-audit services that we have provided to the bank and its subsidiaries are in accordance with the applicable law and regulations in Malta and that we have not provided non-audit services that are prohibited under Article 18A of the Accountancy Profession Act (Cap. 281).
The non-audit services that we have provided to the bank and its subsidiaries, in the period from 1 January 2023 to 31 December 2023, are disclosed in note [17] to the financial statements.
Our audit approach
|
|
· Overall group materiality: €4.1 million, which represents approximately 5% of the two-year average profit before tax adjusted for non-recurring items. |
|
· The group audit engagement team carried out a full scope audit on the bank. The financial statements of HSBC Life Assurance (Malta) Ltd were audited by a component auditor within the same office as the group audit engagement team. HSBC Global Asset Management (Malta) Limited was deemed immaterial. |
|
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· Credit loss allowances in respect of loans and advances to customers · Implementation of IFRS 17: Transition methodology, judgements and related estimates · Valuation of insurance contract liabilities |
As part of designing our audit, we determined materiality and assessed the risks of material misstatement in the consolidated financial statements. In particular, we considered where the directors made subjective judgements; for example, in respect of significant accounting estimates that involved making assumptions and considering future events that are inherently uncertain. As in all of our audits, we also addressed the risk of management override of internal controls, including among other matters consideration of whether there was evidence of bias that represented a risk of material misstatement due to fraud.
The scope of our audit was influenced by our application of materiality. An audit is designed to obtain reasonable assurance whether the financial statements are free from material misstatement. Misstatements may arise due to fraud or error. They are considered material if individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the consolidated financial statements.
Based on our professional judgement, we determined certain quantitative thresholds for materiality, including the overall group materiality for the consolidated financial statements as a whole as set out in the table below. These, together with qualitative considerations, helped us to determine the scope of our audit and the nature, timing and extent of our audit procedures and to evaluate the effect of misstatements, both individually and in aggregate on the financial statements as a whole.
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Overall group materiality |
€4,077,000 |
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How we determined it |
Approximately 5% of the two-year average profit before tax adjusted for non-recurring items |
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Rationale for the materiality benchmark applied |
We chose the profit before tax adjusted for non-recurring items as the benchmark because in our view it is the benchmark against which the performance of the local group is most commonly measured by users and is a generally accepted benchmark. Average profit before tax over the past two financial years was chosen due to the significant increase in net interest income experienced during the financial year ended 31 December 2023 as a result of the increasing interest rate environment. We considered the two-year average profit before tax to be more reflective of the financial position and performance of the local group. We chose 5% which is within the range of quantitative materiality thresholds that we consider acceptable. |
We agreed with the Audit Committee that we would report to them misstatements identified during our audit above €203,000 as well as misstatements below that amount that, in our view, warranted reporting for qualitative reasons.
Key audit matters are those matters that, in our professional judgement, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters.
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Key audit matter |
How our audit addressed the Key audit matter |
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Credit loss allowances in respect of loans and advances to customers Credit loss allowances in respect of loans and advances to customers represent management’s best estimate of expected credit losses (‘ECLs’) within the loan portfolios at the balance sheet date. The development of the models designed to estimate ECLs on loans measured at amortised cost in accordance with the requirements of IFRS 9 requires a considerable level of judgement since the determination of ECLs is subject to a high degree of estimation uncertainty. In general, the bank calculates ECL by using the following key inputs: probability of default (‘PD’), loss given default (‘LGD’) and exposure at default (‘EAD’). The maximum period considered when measuring ECL is the maximum period over which the bank is exposed to credit risk. The bank also applies overlays where management’s view is that the calculated ECLs based on these key inputs do not fully capture the risks within the bank’s portfolios. ECL calculation for Wholesale exposures Credit loss allowances relating to all loans and advances within the Wholesale portfolio are determined at an instrument level. For non-defaulted (Stages 1 and 2) exposures, the bank uses an ECL model that relies on risk parameters, specifically proxy PDs, determined at HSBC Group level. Through-The-Cycle (‘TTC’) PDs are determined by reference to a Global Master Scale which captures historical default rates at credit rating level observed in respect of similar portfolios held by the HSBC Group across a number of countries. TTC PDs are converted to Point-in-Time (‘PiT’) PDs on the basis of correlations attributable to the proxy country/portfolio within the HSBC Group that has the credit risk characteristics which are most similar to those of the bank’s portfolio. In addition, the output proxy PD is further adjusted using a scalar to reflect local macroeconomic conditions. The LGD used for the Wholesale portfolio is driven by the loan-to-value ratio of the individual facilities and takes into account other assumptions, including market value haircut (which includes costs to sell), time to sell and the impact of discounting the collateral from the date of realisation back to the date of default. Staging is determined on the basis of both quantitative criteria and qualitative criteria. In respect of the former, for the Wholesale portfolio, the bank’s ECL model captures Significant Increase in Credit Risk (‘SICR’) events at an individual borrower level through a quantitative comparison of changes in PiT PDs at reporting date with the equivalent estimation at origination date. In respect of the latter, a Customer Risk Rating (‘CRR’) is assigned at individual borrower level on the basis of a qualitative credit risk assessment performed at least annually to assess the default risk by reference to a defined set of criteria, with pre-established notch deteriorations in CRR grades representing a SICR event. The application of the SICR criteria used by management therefore involves a significant level of judgement. Due to the macroeconomic uncertainties being experienced, the bank performed an assessment in order to identify borrowers whose financial performance is deemed to be particularly susceptible to the potential impact of the current inflationary and elevated interest rate environment in order to assess whether a SICR event has occurred. For defaulted (Stage 3) exposures within the Wholesale portfolio, discounted cash flow models are utilised in order to estimate ECLs. Judgement is required to determine when a default has occurred and then to estimate the expected future cash flows related to that loan which are dependent on parameters or assumptions such as the valuation of collateral (including forced sale discounts and assumed realisation period) or forecasted operating cash flows. The bank is also required to assess multiple scenarios in this respect, which scenarios will have probabilities attached. ECL calculation for Retail exposures Credit loss allowances relating to all loans and advances within the Retail portfolio (Stages 1, 2 and 3), comprising mortgages, personal loans and overdrafts as well as credit cards are determined through the use of ECL models, which inherently require a significant level of judgement to be applied by management in the determination of key assumptions and calibration of key model parameters. The models are used to calculate ECLs based on key assumptions, such as loss rates (reflecting a combined impact of PDs and EADs) and loss severities (including the impact of implied cure rates, valuation haircuts of collateral in the case of mortgages, and recovery rates). Loss rates and LGDs are estimated using internally developed statistical models and historical model development data based on the bank’s own experience as available at the reporting date. The LGD for the mortgage portfolio is also driven by the loan-to-value ratio of exposures, taking into account similar assumptions as those applied for the Wholesale portfolio, as well as the status of the perfection of collateral and the vintage years in default. The model for loss severities in respect of the mortgage portfolio takes into consideration multiple work-out options. The loss severities for the remaining Retail portfolios are based on the bank’s recovery history. Staging in respect of Retail portfolios is determined at segment level in view of the homogeneity in nature and relatively low value of retail exposures. Segmentation is determined on the basis of the relevant identified credit risk characteristics for each portfolio. Exposures classified within the Mortgage portfolio are segmented by reference to delinquency status, past delinquency in the previous 12 months, as well as a behavioural score in case of exposures with no history of delinquency throughout the previous 12 months. Segmentation in respect of the other retail portfolios is based on current delinquency status. A SICR threshold is determined in respect of each retail portfolio by reference to the average PD twelve months prior to exposures falling more than 30 days past due. In this respect, PDs are estimated in respect of each segment and segments with a PD in excess of the SICR threshold are classified as stage 2 exposures. The local impact of the inflationary pressures being currently experienced in the local economy and the ensuing elevated interest rate environment has increased the level of uncertainty around judgements made in determining the timing of defaults and in respect of staging, particularly within the Mortgage portfolio. In this respect, these inflationary pressures might be reasonably expected to impact the affordability of repayments within the Mortgage portfolio due to the rapid rise in the cost of living being experienced locally together with the potential resultant impact on market interest rates. Such inflationary pressures are deemed to be partially mitigated by government support measures, including subsidies on energy prices and foodstuffs. For the purposes of avoiding the cliff edge effect on ECLs upon the unwinding of government support schemes, as well as to capture risks which are not fully captured by the selected macroeconomic variables applied in the ECL model, an overlay was applied by the bank determined on the basis of quantitative assumptions in respect of borrower affordability and levels of net disposable income to enable the identification of SICR or Unlikeliness-to-Pay (‘UTP’) events as early as possible. Forward-looking scenarios applied in the ECL calculation of loans and advances to customers Under IFRS 9, the bank is also required to formulate and incorporate multiple forward-looking economic conditions, reflecting management’s view of potential future economic variables and environments, into the ECL estimates. A number of macroeconomic scenarios based on the selected macroeconomic variables are considered to capture non-linearity across credit portfolios. The complexity attributable to this factor requires management to develop multiple macroeconomic scenarios involving the use of significant judgements. The bank utilises a methodology to generate the economic inputs applied within the ECL models. Specifically, the bank applies four macroeconomic scenarios to capture the current economic environment, reflecting management’s view of the range of potential outcomes. For Retail portfolios, the impact of macroeconomic scenarios on PDs is modelled at a portfolio level. In contrast, no impact is modelled on LGDs. The macroeconomic variables applied to retail exposures are specific to Malta. For Mortgages, these comprise unemployment, real Gross Domestic Product (‘GDP’) growth, and the House Price Index (‘HPI’), whereas unsecured Retail portfolios are linked to either unemployment or real GDP growth. The forward-looking PDs and LGDs applied in respect of non-credit impaired Wholesale exposures are modelled by reference to a proxy country’s macroeconomic paths, shifted by a scalar to reflect the difference between the proxy country’s and local sensitivities to economic shocks. The most suitable proxy country is determined using a methodology designed to compare proxy sites’ principal component macroeconomic variables to local variables. The selected macroeconomic variables applied in the ECL calculation of non-credit impaired Wholesale exposures comprise the proxy country’s real GDP growth rate, unemployment rate, consumer price index, short-term interest rate, and HPI. For credit impaired Wholesale exposures, LGD estimates take into account independent recovery valuations provided by external consultants, or internal forecasts corresponding to anticipated economic conditions and individual company conditions. The current inflationary economic environment and the ensuing macroeconomic uncertainty induced by the general increase in interest rates, together with geopolitical uncertainties driven by the ongoing Russia-Ukraine conflict and the escalation of the Middle East conflict towards the end of 2023, have significantly impacted macroeconomic factors such as GDP, unemployment, the consumer price index and interest rates, increasing the uncertainty around judgements made in determining the severity and likelihood of macroeconomic forecasts across the different economic scenarios used in ECL models. Overly sensitive ECL modelled outcomes can be observed when current conditions fall outside the range of historical experience. In this respect, the selection of the macroeconomic variables applied to modelled PDs as well as the methodology used to calibrate the sensitivity of PDs to changes in macroeconomic conditions require a significant level of expert judgement. Data used in the impairment calculation is sourced from a number of systems, including systems that are not necessarily used for the preparation of accounting records. This increases risk around completeness and accuracy of certain data used to create assumptions and operate the models. In some cases, data is unavailable and reasonable alternatives have been applied to allow calculations to be performed. The bank’s application of the IFRS 9 impairment requirements is deemed to be an area of focus due to the subjective nature of specific data inputs into the calculation and the subjective judgements involved in both timing of recognition of impairment and the estimation of the size of any such impairment. Accordingly, summarising the key areas relevant to the bank’s measurement of ECLs would include: • Allocation of assets to stage 1, 2, or 3 using criteria in accordance with IFRS 9; • Accounting interpretations and modelling assumptions used to build the models that calculate the ECL; • Completeness and accuracy of data used to calculate the ECL; • Inputs and assumptions used to estimate the impact of multiple macroeconomic scenarios; • Measurements of individually assessed provisions including the assessment of multiple scenarios; and • The measurement and application of post-model adjustments designed to capture risks not captured by the model.
Relevant references in the financial statements: • Accounting policies: Note 3(b); • Credit risk management: Note 4(b); • Note on Change in expected credit losses and other credit impairment charges: Note 15; • Note on Loans and advances to customers: Note 25; and • Critical estimates and judgements: Note 54(a).
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During our audit of the financial statements for the year ended 31 December 2023, we continued to focus on the key drivers of the estimation of ECL and assessed the continuing appropriateness of management assumptions and key parameters. Discussions with the Audit Committee included: · Inputs and assumptions within the bank’s ECL models, for which we provided updates on the results of our testing procedures; · the application of forward economic guidance, particularly in the context of the estimated impact of the macroeconomic challenges driven by the global inflationary pressures and the ensuing elevated interest rate environment, together with geopolitical uncertainties driven by the ongoing military conflict between Russia and Ukraine and the escalation of the Middle East conflict; · considerations around post-model adjustments, mainly in response to the impact of the inflationary pressures and elevated interest rate environment being experienced, and the estimation uncertainty involved in determining ECLs on the basis of historical experience; · observations in relation to the control processes around the estimation of ECLs in respect of individually significant loans classified within the Wholesale portfolio, including the inputs to the calculations; and · considerations in respect of the governance framework around the implementation of model changes. ECL calculation for non-defaulted Wholesale exposures and for all Retail exposures We understood and critically assessed the models used for ECL estimation in both Wholesale and Retail portfolios. Since modelling assumptions and parameters are based on historic data, we assessed the impact of the current circumstances on the adequacy of key model parameters, since these are not necessarily reflective of the circumstances and economic conditions observed during the period covered by the model development data. The appropriateness of management’s judgements was also independently considered in respect of calculation methodologies, calibration of PDs/loss rates and LGDs, segmentation, selection of macroeconomic variables and post-model adjustments. Model calculations were also tested independently. The design and operating effectiveness of key controls management has established across the processes relevant to the ECL models were tested as follows: · Model performance monitoring, including reconciliation of model parameters against approved models. · Review and challenge of multiple economic scenarios by an expert panel and internal governance committee. · Inputs of critical data into source systems, and the flow and transformation of data between source systems to the impairment calculation engine. · Review and challenge to assess ECL output and approval of overlays.
We determined that we could rely on these controls for the purposes of our audit.
Substantive procedures were performed as follows: · Performed an overall assessment of the ECL provision levels by stage to determine if they were reasonable considering the bank’s portfolios, risk profile, credit risk management practices and the macroeconomic environment. · Tested a sample of loans within the Wholesale portfolio to independently review the borrower’s financial performance and ability to meet loan repayments and assess the appropriateness of the credit rating assigned by management, taking into consideration the impact of the current macroeconomic environment on the repayment capabilities of the sampled borrowers. · Challenged the criteria used to allocate an exposure to stage 1, 2 or 3 in accordance with IFRS 9 and tested exposures in stage 1, 2 and 3 to verify that they were allocated to the appropriate stage. · Tested the completeness and accuracy of the critical data, extracted from the underlying systems, that is utilised within the models for the purposes of the year end ECL calculation. · Reviewed the script codes for the impairment engine against business requirements and our expectations of how the calculation should operate. · Risk based testing of models, including a review of the continuing appropriateness of model assumptions. We tested the assumptions, inputs and formulas used in ECL models on a sample basis. This included assessing the appropriateness of model design and formulas used, and recalculating PDs, LGDs and EADs on a sample basis. · For both the Wholesale and Mortgage portfolios, assessed the reasonableness of modelled PDs through a comparison of historically predicted and observed default rates. · For the Mortgage portfolio, assessed the reasonableness of market value haircuts and time to sell assumptions used as inputs to modelled LGDs. We also tested the accuracy of the bank’s data in respect of the status of perfection of collateral and the vintage years in default, assessing the key judgements applied by management to identify the exposures which are deemed to carry a higher level of risk in the estimation of ECL. · Assessed critically the criteria used by management for identifying borrowers whose financial performance is deemed to be particularly susceptible to the potential impact of the significant inflationary pressures and elevated interest rate environment being experienced. For Wholesale exposures, we independently performed an assessment to identify borrowers whose credit quality is deemed to be more sensitive to such macroeconomic uncertainties and to estimate the potential impact on ECLs arising from further downgrades in credit ratings. For Mortgages, we assessed the appropriateness of the post-model adjustment intended to address early identification of SICR events in respect of those exposures which are deemed to be more susceptible to inflationary pressures and increases in interest rates. · Independent testing of model calculations. · Tested the multiple macroeconomic scenarios and variables using our experts to assess their reasonableness. We assessed the appropriateness of changes effected to factor the impact of the current macroeconomic environment, including the recalibration of probability weights. We assessed whether the severity of the forecasted macroeconomic variables was appropriate and challenged the correlation and impact of the macroeconomic factors on the ECL. Our testing of models and model assumptions did not highlight material differences. Based on the evidence obtained, we found that the model assumptions, data used within the models and overlays to be reasonable. ECL calculation for defaulted Wholesale exposures For defaulted exposures within the Wholesale portfolio, the appropriateness of the methodology and policy used to calculate ECLs was independently assessed. We understood and evaluated the processes for identifying default events within loan portfolios, as well as the impairment assessment processes. In respect of defaulted exposures, the design and operating effectiveness of key controls established by management were tested over: · The timeliness of the performance and review of the credit file review processes. · The determination of which loans and advances are credit-impaired, including the timely identification of such defaulted exposures. We determined that we could rely on these controls for the purposes of our audit. Substantive procedures were performed in respect of identification of defaults as follows: · Selected a sample of performing loans, including from within those sectors that we consider to be particularly impacted by the current macroeconomic environment, which had not been identified by management as potentially defaulted, to form our own judgement as to whether management’s judgement was appropriate and to further challenge whether all relevant events had been identified by management. Substantive procedures were performed on defaulted exposures in respect of the estimation of the size of the respective ECL provisions, as follows: · Reviewed the credit files of a selected sample of corporate loans to understand the latest developments at the level of the borrower and the basis of measuring the ECL provisions and considered whether key judgements (such as market value haircuts and time to sell for gone concern assessments) were appropriate given the borrowers’ circumstances. · Challenged the appropriateness of the scenarios being applied for the exposures referred to above, particularly in respect of the extent to which they consider the potential impact of the current macroeconomic environment on the local property market, together with their respective probability weights, by forming an independent view of the market value haircuts and time to sell assumptions used by the bank under different scenarios in determining the recoverability of the selected corporate loans. · Challenged the reasonableness of the use of a going concern assessment in respect of a sample of individually significant defaulted exposures, as well as the appropriateness of the methodology applied by management to estimate ECL under a going concern scenario. · Tested key inputs to and reperformed the impairment calculation used to derive expected cash flows under different scenarios. · Assessed the appropriateness of a sample of property valuations securing impaired loans through our experts. · Tested the perfection of security in line with the bank’s policy.
In the case of some impairment provisions, we formed a different view from that of management, but in our view the differences were within a reasonable range of outcomes. |
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Implementation of IFRS 17: Transition methodology, judgements and related estimates IFRS 17 became effective for periods beginning on or after 1 January 2023, replacing IFRS 4, ‘Insurance Contracts’. As a result, the local group has adopted IFRS 17 in these financial statements. The 2022 opening statement of financial position and the 2022 comparatives have been restated in order to comply with the requirements of IFRS 17, and are presented within these financial statements. Transition to IFRS 17 introduces significant changes to the recognition, measurement and presentation of (re-)insurance contract liabilities (or assets), and requires significant judgement to estimate the impact on 1 January 2022 (the ‘transition date’) and 31 December 2022 (‘comparative period’). IFRS 17 adoption has resulted in a significant reduction in the local group’s accumulated profit at the transition date (€22.4 million). This is primarily due to the derecognition of the present value of in force business and the establishment of the Contractual Service Margin (‘CSM’) on adopting IFRS 17. The CSM is the mechanism in IFRS 17 by which profits are deferred and amortised over the duration of a contract. The key methodology, judgements and assumptions first applied on transition to the new standard include: · The determination of the date before which it is impracticable to apply the fully retrospective approach to calculate the CSM on transition; · The approach applied to determine the fair value of the CSM on transition, including the selection of assumptions used in this calculation; · The determination of IFRS 17 groups of contracts at which calculations will be undertaken, including determining the onerousness of contracts; · The methodology to be applied in calculating IFRS 17 liabilities, including risk adjustment and CSM; and · Variable Fee Approach eligibility for certain portfolios of contracts.
There is a risk that the CSM modelling is not appropriate or the agreed methodology has not been implemented correctly in the CSM model. There is also a risk of error within the accounting logic used to eventually populate the General Ledger. There is a risk that the key judgements and estimates applied at transition and for 2022 restatement are not described in an appropriate level of detail for users of the financial statements to understand the decisions made by management. Relevant references in the financial statements: • Basis of preparation: Note 2(a); • Accounting policies: Note 3(i); • Note on Insurance business: Note 10; • Note on Effects of adoption of IFRS 17: Note 49; and • Critical estimates and judgements: Note 54(b).
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Our audit procedures addressing the implementation of IFRS 17 included inter alia the following procedures using our IFRS 17 and actuarial specialist team members: · We assessed the methodology applied against the IFRS 17 requirements and assessed the application of the methodology to the local group and its products, including Variable Fee Approach eligibility; · We obtained an understanding of and challenged the key methodologies, judgements and assumptions used to develop and calculate the transition balance sheet and restated comparatives on adopting IFRS 17, including the determination of the level of contract aggregation; · We obtained an understanding of management’s approach to transition including the selection of the fully retrospective and fair value approaches (the ‘transition approaches’), and challenged management’s assessment of impracticability of adopting the fully retrospective approach to measure the transition CSM; · We tested the CSM model’s compliance with IFRS 17 by inter alia examining a risk based sample of management’s test cases to demonstrate that the CSM model is materially compliant with the requirements of the standard for the measurement models used by the local group. We also tested the accounting logic and assessed its compliance with the requirements of the standard; · We tested the inputs and outputs to/from the CSM model on a sample basis by inter alia performing testing of controls and substantive testing (including over key reconciliations) in relation to completeness and accuracy of data flows; · We performed testing over the calculations and assumptions used to determine the fair value of (re-)insurance contracts CSM at the transition date; and · We tested the adequacy and compliance of the new quantitative and qualitative disclosures in the financial statements. Based on the audit procedures performed, we consider the transition methodology, judgements and related estimates to be consistent with the explanations and evidence obtained.
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Valuation of insurance contract liabilities As described above, the local group has adopted IFRS 17 ‘Insurance contracts’. The standard sets out the requirements that an entity should apply in accounting for insurance contracts it issues, reinsurance contracts it holds and investment contracts with discretionary participating features it issues. As at 31 December 2023, the local group recorded insurance contract liabilities of €519.4 million. As explained in Note 3(i), the local group’s insurance contract liabilities are measured as the total of fulfilment cash flows (comprising the best estimates of future cash flows and risk adjustment) and contractual service margin, the determination of which required judgement and interpretation. This includes the selection of accounting policies and the use of complex methodologies. Management’s selection and application of appropriate methodologies requires significant professional judgement. The valuation also requires the determination of assumptions about future events, both internal and external to the business, giving rise to estimation uncertainty. The valuation of these liabilities is complex and sensitive to changes in assumptions. We focused on this area due to its materiality and the subjectivity of the judgements made. As part of our consideration of the entire set of assumptions, we focused particularly on expense assumptions, and mortality, morbidity and lapse assumptions as these are considered the most significant and judgemental, considered individually below. In addition, the complexity of the IFRS 17 adoption has been considered separately in the key audit matter above titled ‘Implementation of IFRS 17: Transition methodology, judgements and related estimates’.
Valuation of insurance contract liabilities - expense assumptions The valuation of insurance contract liabilities includes estimated future expenses that are expected to be incurred in the administration and maintenance of the existing policies to their maturity and includes an allowance for future inflation. The assumptions used require judgement, particularly with respect to the allocation of expenses to future maintenance, the estimation of policy volumes and future cost inflation. IFRS 17 brought about certain changes to the treatment of expenses, requiring the local group to analyse expenses between acquisition costs, directly attributable expenses and non-attributable (i.e. out of scope) expenses. The valuation of the insurance contract liabilities is sensitive to changes in allocations between categories and changes in assumptions.
Valuation of insurance contract liabilities - mortality, morbidity and lapse assumptions Insurance contract liabilities are sensitive to the choice of assumptions, with those relevant to mortality, morbidity and lapse assumptions highlighted as amongst those having the biggest impact. There is a risk that the assumptions are not appropriate given the variability in experience and the relatively small size of the local group’s business, given the pool of data from which to assess experience. In setting mortality, morbidity and lapse assumptions, management utilise the local group's own historic experience, supplemented with additional external data in the calculation of the appropriate assumptions. In doing so there is a risk that mortality, morbidity and lapse assumptions are not appropriate. With the adoption of IFRS 17, the local group is now required to set assumptions on a best estimate basis (i.e. without margins).
Relevant references in the financial statements: • Accounting policies: Note 3(i); • Note on Insurance business: Note 10; and • Critical estimates and judgements: Note 54(b).
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We performed the following audit procedures to test the valuation of insurance contract liabilities (including best estimate liabilities, risk adjustment and contractual service margin), using our IFRS 17 and actuarial specialist team members: · Tested the design and, where applicable, operating effectiveness of the controls in place over the determination of the insurance contract liabilities, including those relating to model inputs, model operation and extraction of results from the actuarial model; · Tested the design and, where applicable, the operating effectiveness of controls related to the completeness and accuracy of policyholder data used in the valuation of insurance contract liabilities; · Tested the accuracy of the underlying data utilised for the purposes of measurement by reference to its source; · Applied our industry knowledge and experience to assess the appropriateness of the methodology, model and assumptions used against recognised actuarial practices; · Tested management’s controls in respect of the valuation and assumption setting processes; · Performed testing over the actuarial model calculations. We have placed reliance on model baselining carried out as part of our prior audits and examined the analysis of change in modelled results, to assess whether the model continues to operate as expected; and · Performed model testing over the CSM engine (see separate key audit matter pertaining to Implementation of IFRS 17).
In respect of the expense assumptions, we performed the following additional procedures using our IFRS 17 and actuarial specialist team members: · We have tested and challenged the appropriateness of the allocation between attributable and non-attributable expenses on a sample basis; · We have reviewed, and where relevant, challenged the appropriateness of these cost allocations in the context of IFRS 17 requirements (see separate key audit matter pertaining to Implementation of IFRS 17) and actual costs incurred during the year (by inter alia obtaining an understanding of variance prepared by management); · We have assessed the impact of the current inflationary environment on the assumptions. In this respect, we understood and challenged the basis on which expenses are projected by reference to market observable data (inflation curve), and further understood the main drivers of the increase in per policy expenses (disclosed in Note 54) and challenged management’s intent to carry out certain future actions linked to attributable expenses by inter alia confirming that these actions were approved by the Board of Directors; and · We have assessed the reasonableness of the policy volumes used in the expense calculation.
In respect of the mortality, morbidity and lapse assumptions, we performed the following additional procedures using our actuarial specialist team members: · We tested the design and operation of controls within the experience analysis and input of assumptions into the model processes; · Tested the results of the most recent mortality, morbidity and lapse experience analysis against the judgements applied in setting the assumptions; · Tested the appropriateness of the local group’s experience analysis methodology by comparing against industry best practice; · Tested the appropriateness of the assumptions in light of the specific characteristics of the business and industry practices; and · Reviewed management’s sense checks and performed internal reasonableness analytics over the impacts of any assumption changes.
In respect of all the assumptions referred to above, we have reviewed the management’s approach to setting the assumptions, assessed the assumptions’ appropriateness based on internal and external data (where available), and tested management’s governance and controls over the assumption basis review. We also reviewed the modelled results and manual adjustments, and we assessed the reasonableness of management’s analysis of the changes in the carrying amounts. Based on the work performed, we found the valuation of insurance contract liabilities (including best estimate, risk adjustment and contractual service margin) to be consistent with the explanations and evidence obtained.
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How we tailored our group audit scope
The local group is composed of three components: HSBC Bank Malta p.l.c. (the “Parent Company” or “bank”), and its subsidiaries HSBC Life Assurance (Malta) Ltd, which is determined to be a financially significant entity, and HSBC Global Asset Management (Malta) Limited.
We tailored the scope of our audit in order to perform sufficient work to enable us to provide an opinion on the financial statements as a whole, taking into account the structure of the local group, the accounting processes and controls, and the industry in which the local group operates.
The group audit engagement team carried out a full scope audit on the Parent Company. The financial statements of HSBC Life Assurance (Malta) Ltd were audited by a component auditor within the same office as the group audit engagement team and, in this respect, we determined the level of involvement we needed to have in their audit work to be able to conclude whether sufficient appropriate audit evidence had been obtained as a basis for our opinion on the consolidated financial statements of the local group as a whole. The figures of HSBC Global Asset Management (Malta) Limited are deemed to be immaterial in the context of the local group’s results.
The audit engagement team of the local group performed all of this work by applying the overall materiality at the level of the local group’s consolidated financial statements, together with additional procedures performed on the consolidation. This gave us sufficient appropriate audit evidence for our opinion on the local group financial statements as a whole.
Other information
The directors are responsible for the other information. The other information comprises all of the information presented in the Annual Report and Accounts 2023 (but does not include the financial statements and our auditor’s report thereon).
Our opinion on the financial statements does not cover the other information and we do not express any form of assurance conclusion thereon except as explicitly stated within the Report on other legal and regulatory requirements.
In connection with our audit of the financial statements, our responsibility is to read the other information identified above and, in doing so, consider whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated.
If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.
The directors are responsible for the preparation of financial statements that give a true and fair view in accordance with IFRSs as adopted by the EU and the requirements of the Maltese Banking Act (Cap. 371) and the Maltese Companies Act (Cap. 386), and for such internal control as the directors determine is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, the directors are responsible for assessing the local group’s and the bank’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the directors either intend to liquidate the local group or the bank or to cease operations, or have no realistic alternative but to do so.
Those charged with governance are responsible for overseeing the local group’s financial reporting process.
Auditor’s responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgement and maintain professional scepticism throughout the audit. We also:
· Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
· Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the local group’s and the bank’s internal control.
· Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the directors.
· Conclude on the appropriateness of the directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the local group’s or the bank’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the local group or the bank to cease to continue as a going concern.
· Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
· Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the local group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, actions taken to eliminate threats or safeguards applied.
From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.
Report on other legal and regulatory requirements
Report on compliance with the requirements of the European Single Electronic Format Regulatory Technical Standard (the “ESEF RTS”), by reference to Capital Markets Rule 5.55.6
We have undertaken a reasonable assurance engagement in accordance with the requirements of Directive 6 issued by the Accountancy Board in terms of the Accountancy Profession Act (Cap. 281) - the Accountancy Profession (European Single Electronic Format) Assurance Directive (the “ESEF Directive 6”) on the Annual Financial Report of HSBC Bank Malta p.l.c. for the year ended 31 December 2023, entirely prepared in a single electronic reporting format.
Responsibilities of the directors
The directors are responsible for the preparation of the Annual Financial Report, including the consolidated financial statements and the relevant mark-up requirements therein, by reference to Capital Markets Rule 5.56A, in accordance with the requirements of the ESEF RTS.
Our responsibilities
Our responsibility is to obtain reasonable assurance about whether the Annual Financial Report, including the consolidated financial statements and the relevant electronic tagging therein, complies in all material respects with the ESEF RTS based on the evidence we have obtained. We conducted our reasonable assurance engagement in accordance with the requirements of ESEF Directive 6.
Our procedures included:
· Obtaining an understanding of the entity's financial reporting process, including the preparation of the Annual Financial Report, in accordance with the requirements of the ESEF RTS.
· Obtaining the Annual Financial Report and performing validations to determine whether the Annual Financial Report has been prepared in accordance with the requirements of the technical specifications of the ESEF RTS.
· Examining the information in the Annual Financial Report to determine whether all the required taggings therein have been applied and whether, in all material respects, they are in accordance with the requirements of the ESEF RTS.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Opinion
In our opinion, the Annual Financial Report for the year ended 31 December 2023 has been prepared, in all material respects, in accordance with the requirements of the ESEF RTS.
Other reporting requirements
The Annual Report and Accounts 2023 contains other areas required by legislation or regulation on which we are required to report. The Directors are responsible for these other areas.
The table below sets out these areas presented within the Annual Financial Report, our related responsibilities and reporting, in addition to our responsibilities and reporting reflected in the Other information section of our report. Except as outlined in the table, we have not provided an audit opinion or any form of assurance.
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Area of the Annual Report and Accounts 2023 and the related Directors’ responsibilities |
Our responsibilities |
Our reporting |
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Report of the Directors The Maltese Companies Act (Cap. 386) requires the directors to prepare a Directors’ report, which includes the contents required by Article 177 of the Act and the Sixth Schedule to the Act. |
We are required to consider whether the information given in the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements.
We are also required to express an opinion as to whether the Directors’ report has been prepared in accordance with the applicable legal requirements.
In addition, we are required to state whether, in the light of the knowledge and understanding of the bank and its environment obtained in the course of our audit, we have identified any material misstatements in the Directors’ report, and if so to give an indication of the nature of any such misstatements.
With respect to the information required by paragraphs 8 and 11 of the Sixth Schedule to the Act, our responsibility is limited to ensuring that such information has been provided. |
In our opinion: · the information given in the Directors’ report for the financial year for which the financial statements are prepared is consistent with the financial statements; and · the Directors’ report has been prepared in accordance with the Maltese Companies Act (Cap. 386).
We have nothing to report to you in respect of the other responsibilities, as explicitly stated within the Other information section.
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Statement of Compliance with the Code of Principles of Good Corporate Governance The Capital Markets Rules issued by the Malta Financial Services Authority require the directors to prepare and include in the Annual Financial Report a Statement of Compliance with the Code of Principles of Good Corporate Governance within Appendix 5.1 to Chapter 5 of the Capital Markets Rules. The Statement’s required minimum contents are determined by reference to Capital Markets Rule 5.97. The Statement provides explanations as to how the bank has complied with the provisions of the Code, presenting the extent to which the bank has adopted the Code and the effective measures that the Board has taken to ensure compliance throughout the accounting period with those Principles.
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We are required to report on the Statement of Compliance by expressing an opinion as to whether, in light of the knowledge and understanding of the bank and its environment obtained in the course of the audit, we have identified any material misstatements with respect to the information referred to in Capital Markets Rules 5.97.4 and 5.97.5, giving an indication of the nature of any such misstatements.
We are also required to assess whether the Statement of Compliance includes all the other information required to be presented as per Capital Markets Rule 5.97.
We are not required to, and we do not, consider whether the Board’s statements on internal control included in the Statement of Compliance cover all risks and controls, or form an opinion on the effectiveness of the bank’s corporate governance procedures or its risk and control procedures. |
In our opinion, the Statement of Compliance has been properly prepared in accordance with the requirements of the Capital Markets Rules issued by the Malta Financial Services Authority.
We have nothing to report to you in respect of the other responsibilities, as explicitly stated within the Other information section. |
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Remuneration report The Capital Markets Rules issued by the Malta Financial Services Authority require the directors to prepare a Remuneration report, including the contents listed in Appendix 12.1 to Chapter 12 of the Capital Markets Rules. |
We are required to consider whether the information that should be provided within the Remuneration report, as required in terms of Appendix 12.1 to Chapter 12 of the Capital Markets Rules, has been included. |
In our opinion, the Remuneration report has been properly prepared in accordance with the requirements of the Capital Markets Rules issued by the Malta Financial Services Authority. |
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Other matters prescribed by the Maltese Banking Act (Cap. 371) In terms of the requirements of the Maltese Banking Act (Cap. 371), we are also required to report whether: · we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; · proper books of account have been kept by the bank, so far as appears from our examination of those books; · the bank’s financial statements are in agreement with the books of account; · in our opinion, and to the best of our knowledge and according to the explanations given to us, the financial statements give the information required by any law which may from time to time be in force in the manner so required. |
In our opinion: · we have obtained all the information and explanations which to the best of our knowledge and belief were necessary for the purpose of our audit; · proper books of account have been kept by the bank, so far as appears from our examination of those books; · the bank’s financial statements are in agreement with the books of account; and · to the best of our knowledge and according to the explanations given to us, the financial statements give the information required by any law in force in the manner so required.
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Other matters on which we are required to report by exception We also have responsibilities under the Maltese Companies Act (Cap. 386) to report to you if, in our opinion, adequate accounting records have not been kept, or returns adequate for our audit have not been received from branches not visited by us.
We also have responsibilities under the Capital Markets Rules to review the statement made by the directors that the business is a going concern together with supporting assumptions or qualifications as necessary. |
We have nothing to report to you in respect of these responsibilities. |
Other matter – use of this report
Our report, including the opinions, has been prepared for and only for the bank’s shareholders as a body in accordance with Article 179 of the Maltese Companies Act (Cap. 386) and for no other purpose. We do not, in giving these opinions, accept or assume responsibility for any other purpose or to any other person to whom this report is shown or into whose hands it may come save where expressly agreed by our prior written consent.
Appointment
We were first appointed as auditors of the local group and bank on 22 April 2015. Our appointment has been renewed annually by shareholder resolution representing a total period of uninterrupted engagement appointment of 9 years.
Norbert Paul Vella
Principal
For and on behalf of
PricewaterhouseCoopers
78, Mill Street
Zone 5, Central Business District
Qormi
Malta
21 February 2024
