HSBC reports sharp drop in profitability in Q1 2022

The MSE Equity Price Index extended yesterday’s decline as it dropped by a further 0.14% to 3,699.669 points. The declines in HSBC, BMIT and Mapfre Middlesea outweighed the gains in MIA and the ordinary shares of RS2. On the other hand, BOV and Tigné Mall closed unchanged as overall trading activity in equities eased to €0.08 million from €0.28 million yesterday.

HSBC Bank Malta plc slid by 2.5% to the €0.77 level after partly recovering from an 18-month low of €0.75 (-3.8%). A total of 63,239 shares traded. Today, HSBC published a Quarterly Update showing that in Q1 2022 it generated a profit before tax of €4.8 million compared to €9.9 million in Q1 2021.

The drop in profitability was largely driven by adverse market movements which significantly impacted the contribution from the insurance subsidiary. Furthermore, net interest income also decreased reflecting a marginal contraction in the size of the bank’s loan book, tighter margins, as well as a notable increase in customer deposits.

On the other hand, HSBC reported improvement in net fee income driven by increased activity across cards, payments, and foreign exchange. In addition, the Bank continued to implement effective...