FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of July, 2005
HSBC Holdings plc
42nd Floor, 8 Canada
Square, London E14 5HQ, England
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F).
Form 20-F X Form 40-F ......
(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934).
Yes....... No X
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- ..............)
The following is the text of an advertisement which is to be published in the
press in Malta on 23 July 2005 by HSBC Bank Malta p.l.c., a 70.03 per cent
indirectly-held subsidiary of HSBC Holdings plc.
HSBC Bank Malta p.l.c.
Half-Yearly Results for 2005
Review of Performance
The published figures, which have been prepared in accordance with International
Financial Reporting Standards for interim financial statements (IAS 34 'Interim
Financial Reporting'), have been extracted from HSBC Bank Malta p.l.c.'s
unaudited group management accounts for the six months ended 30 June 2005.
The tax charge for the period amounted to Lm6.4 million. The half-yearly results
are being published in terms of Chapters 8 and 9 of the Listing Rules of the
Listing Authority - Malta Financial Services Authority. These figures have been
drawn up according to the accounting policies used in the preparation of the
annual audited accounts, except for a change in the basis of accounting for
investments in subsidiary companies, which were previously measured to fair
value with revaluation adjustments recognised through revaluation reserves.
In order to align its policies with those of its ultimate parent company,
HSBC Holdings plc, HSBC Bank Malta p.l.c. now measures its investment in
subsidiary companies at cost.
The published figures also take into account revisions arising from the IAS
Improvements project, as well as the adoption of the new series of International
Financial Reporting Standards ('IFRS'). The revised standards that had a
significant effect on the group's financial statements include IAS 10 'Events
after the Balance Sheet Date' and IAS 27 'Consolidated and Separate Financial
Statements', and together with the newly adopted IFRS 2 'Share-based Payment',
these standards have been applied retrospectively. Comparative figures have
therefore been restated accordingly. The group adopted IFRS 4 'Insurance
Contracts' from 1 January 2005.
Under IAS 10 as revised, dividends declared after the balance sheet date are no
longer recognised in reserves at the balance sheet date.
IAS 27 now requires that all subsidiaries be consolidated on a line-by-line
basis. Accordingly, the revenues, costs and third party assets of HSBC Life
Assurance (Malta) Limited are no longer being reported in aggregate on single
lines within 'other operating income' and 'other assets'.
IFRS 2 requires entities to recognise share-based payments, in respect of awards
granted after 7 November 2002, at fair value at the date of the grant, which is
to be amortised over the vesting period.
IFRS 4 requires certain insurance products with insignificant insurance risk to
be accounted for under IAS 39 'Financial Instruments: Recognition and
Measurement'.
HSBC Bank Malta p.l.c. and its subsidiaries recorded a profit before tax of
Lm18.5 million for the six months ended 30 June 2005. The tax charge for the
period amounted to Lm6.4 million. Operating profit before net loan impairment
releases is recorded at Lm17.5 million and represents an increase of 14.3 per
cent over the Lm15.3 million earned during the same period in 2004. Earnings per
share for the first six months ended 30 June 2005 decreased to 16.6 cents
compared to 18.0 cents for the first six months of 2004. Comparative data have
been adjusted for the April 2005 two-for-one share split.
- Profit attributable to shareholders of Lm12.1 million, a decrease of 8.1
per cent over the Lm13.2 million earned during the same period in 2004 which
was influenced by a much higher level of impairment releases.
- Net interest income up by 11.9 per cent over prior year to Lm21.3
million.
- Non-interest income increased by 8.7 per cent, contributing Lm12.1
million to net operating income.
- Administrative expenses increased by 8.7 per cent, mainly due to higher
performance-based compensation for all staff. The cost:income ratio improved
from 49.1 per cent to 47.5 per cent.
- The net release in impairment provisions totalled Lm1.0 million. New
specific allowances of Lm0.5 million were raised and bad debt write-offs of
Lm2.4 million were effected. An overall improvement in the credit quality of
the lending book reduced non-performing loans from Lm82.3 million to Lm70.7
million. This contributed towards the release of Lm3.3 million in specific
allowances and Lm0.6 million in collective allowances.
- Customer deposits amounted to Lm1,331.5 million at 30 June 2005 compared
with Lm1,295.8 million at 31 December 2004. Collective investment schemes
managed by the group grew by Lm28.7 million, whilst life assurance assets
grew by Lm9.5 million during the period.
- Loans and advances to customers were Lm1,026.7 million at 30 June 2005 -
up Lm50.4 million or 5.2 per cent over 31 December 2004.
- Total assets amounted to Lm1.63 billion at 30 June 2005 compared with
Lm1.60 billion at 31 December 2004.
Shaun Wallis, Director and Chief Executive Officer of HSBC Bank Malta p.l.c.,
said: "Our results for the first six months confirm the business momentum we
have been building, with solid growth in all three customer groups. Our focus is
on maximising existing business relationships through a clear understanding of
clients' needs.
"In our personal financial services business, we have concentrated on providing
excellent customer service supported by strong sales management. Commercial
banking is similarly focussed on quality customer service and making 'business
more personal'. Both customer groups have recorded significant increases in all
areas as a result. Our treasury and capital markets division has also reported
healthy growth supported by higher volumes of foreign exchange earnings and the
sale of securities.
"The Board has recommended an ordinary interim dividend of 19.1 cents gross per
share and additionally a special dividend of 27.4 cents gross per share, giving
a total interim dividend of 46.5 cents gross per share. This will be payable to
shareholders who are on the company's register of shareholders as at 29 July
2005. The ordinary interim dividend payment of Lm9.1 million has been set at 75
per cent of year-to-date earnings. The special dividend payment of Lm13.0
million is earmarked out of retained reserves built up from earnings over the
last six years and is surplus to local regulatory capital requirements, internal
capital plans and normal global banking practice.
"We would like to thank our customers for their support during the first six
months of this year and to thank our staff for their continued high level of
commitment to customer service.
"We remain optimistic about the economic activity in Malta for the remainder of
the year and our business prospects."
HSBC Bank Malta p.l.c., a member of the HSBC Group, has more than 1,400 staff
and 60 offices.
With over 9,800 offices in 77 countries and territories and over 110 million
customers worldwide at 31 December 2004, the HSBC Group is one of the world's
largest banking and financial services organisations. For more information about
HSBC Bank Malta p.l.c. and its products and services, visit our website at
www.hsbc.com.mt.
Income Statement for the period 1 January 2005 to 30 June 2005
Group Bank
6 mths to 6 mths to 6 mths to 6 mths to
30/6/05 30/6/04 30/6/05 30/6/04
Lm000 Lm000 Lm000 Lm000
Interest receivable and similar income
- on loans and advances and balances
with Central Bank of Malta 29,430 27,764 27,877 26,004
- on debt and other fixed income
instruments 5,536 5,081 6,232 5,785
Interest payable (13,671) (13,812) (13,808) (13,952)
Net interest income 21,295 19,033 20,301 17,837
Fees and commissions receivable 5,587 5,239 4,427 4,306
Fees and commissions payable (359) (327) (287) (279)
Dividend income 38 42 338 2,042
Trading profits 3,598 2,968 3,607 2,974
Net income from insurance financial
instruments designated at fair value 3,860 2,581 - -
Net gains on disposal of non-trading
financial instruments 1,221 1,749 1,267 1,018
Net earned insurance premiums 8,305 7,067 - -
Other operating income 677 664 2 56
Total operating income 44,222 39,016 29,655 27,954
Net insurance claims incurred and
movement in policyholder liabilities (10,857) (8,883) - -
Net operating income 33,365 30,133 29,655 27,954
Administrative expenses (14,410) (13,255) (13,711) (12,610)
Depreciation (1,423) (1,388) (1,367) (1,345)
Net amortisation of goodwill - (145) - (103)
Operating profit 17,532 15,345 14,577 13,896
Net loan impairment (charges)/releases 954 4,468 939 4,467
Profit on ordinary activities before tax 18,486 19,813 15,516 18,363
Tax on profit on ordinary activities (6,396) (6,662) (5,297) (6,452)
Profit for the financial period
attributable to shareholders 12,090 13,151 10,219 11,911
Earnings per share 16.6c 18.0c 14.0c 16.3c
Balance Sheet at 30 June 2005
Group Bank
30/6/05 31/12/04 30/6/05 31/12/04
Lm000 Lm000 Lm000 Lm000
Assets
Balances with Central Bank of Malta,
treasury bills and cash 87,116 106,806 87,114 106,781
Cheques in course of collection 5,324 4,458 5,324 4,458
Financial assets at fair value through
profit or loss 88,158 77,359 6,103 4,826
Investments 234,167 238,446 264,065 268,226
Loans and advances to banks 126,785 131,283 160,859 172,363
Loans and advances to customers 1,026,740 976,296 941,501 884,868
Shares in subsidiary companies - - 19,850 19,850
Intangible assets 9,457 8,782 754 964
Tangible fixed assets 30,018 30,993 29,667 30,620
Other assets 5,961 6,302 5,009 5,381
Prepayments and accrued income 13,722 16,486 13,164 15,716
Total assets 1,627,448 1,597,211 1,533,410 1,514,053
Liabilities
Financial liabilities at fair value
through profit or loss 5,901 9,917 5,901 9,917
Amounts owed to banks 43,231 48,336 43,231 48,336
Amounts owed to customers 1,331,472 1,295,758 1,334,224 1,296,687
Debt securities in issue 12 12 - -
Deferred taxation 3,521 2,251 1,252 561
Other liabilities 85,951 71,443 15,641 11,379
Accruals and deferred income 15,756 15,101 15,598 14,818
Provisions for liabilities and
other charges 2,255 26 2,065 26
Subordinated liabilities - 19,914 - 20,000
1,488,099 1,462,758 1,417,912 1,401,724
Shareholders' funds
Called up share capital 9,120 9,120 9,120 9,120
Revaluation reserves 10,616 11,086 10,567 11,092
Other reserves 4,242 4,242 4,242 4,242
Profit and loss account 115,371 110,005 91,569 87,875
139,349 134,453 115,498 112,329
Total liabilities 1,627,448 1,597,211 1,533,410 1,514,053
Memorandum items
Contingent liabilities 41,179 46,806 41,589 47,226
Commitments 343,960 320,159 352,903 328,104
The financial statements were approved by the Board of Directors on
22 July 2005 and signed on its behalf by:
Albert Mizzi, Chairman Shaun Wallis, Director and Chief Executive Officer
Statement of Changes in Equity for the period 1 January 2005 to 30 June 2005
Group
Share Revaluation Other Profit and Total
capital reserves reserves loss
account
Lm000 Lm000 Lm000 Lm000 Lm000
At 1 January 2004 9,120 10,978 4,242 106,822 131,162
Net fair value adjustments
on investments not recognised
in the profit and loss account - 453 - - 453
Release of previously recorded
net gains on available-for-sale
assets transferred to the
income statement on disposal - (1,556) - - (1,556)
Profit attributable to
shareholders - - - 13,151 13,151
Dividends - - - (5,833) (5,833)
At 30 June 2004 9,120 9,875 4,242 114,140 137,377
At 31 December 2004 as
previously stated 9,120 11,086 4,242 110,125 134,573
Net effect of change arising
from retrospective applicaion
of IFRS 2 - - - (120) (120)
At 31 December 2004 as
restated 9,120 11,086 4,242 110,005 134,453
At 1 January 2005 9,120 11,086 4,242 110,005 134,453
Impact of adoption of IFRS 4 - - - (199) (199)
At 1 January 2005 as restated 9,120 11,086 4,242 109,806 134,254
Net fair value adjustments
on investments not
recognised in the profit
and loss account - 257 - - 257
Transfer between reserves
on disposal of property - 52 - (52) -
Release of previously recorded
net gains on available
-for-sale assets transferred
to the income statement
on disposal - (779) - - (779)
Profit attributable to
shareholders - - - 12,090 12,090
Dividends - - - (6,473) (6,473)
At 30 June 2005 9,120 10,616 4,242 115,371 139,349
Bank
Profit
Share Revaluation Other and loss Total
capital reserves reserves account
Lm000 Lm000 Lm000 Lm000 Lm000
At 31 December 2003
as previously stated 9,120 32,069 4,242 85,626 131,057
Effect of change in
accounting policy for
valuation of investment
in subsidiary companies - (21,752) - - (21,752)
At 31 December 2003 as
restated 9,120 10,317 4,242 85,626 109,305
At 1 January 2004
as restated 9,120 10,317 4,242 85,626 109,305
Net fair value adjustments
on investments not
recognised in the profit and
loss account - 447 - - 447
Release of previously
recorded net gains on
available-for-sale assets
transferred to the income
statement on disposal - (862) - - (862)
Profit attributable
to shareholders - - - 11,911 11,911
Dividends - - - (5,833) (5,833)
At 30 June 2004 as
restated 9,120 9,902 4,242 91,704 114,968
At 31 December 2004 as
previously stated 9,120 33,265 4,242 87,995 134,622
Effect of change in
accounting policy for
valuation of investment
in subsidiary companies - (22,173) - - (22,173)
Net effect of change
arising from retrospective
application of IFRS 2 - - - (120) (120)
At 31 December 2004
as restated 9,120 11,092 4,242 87,875 112,329
At 1 January 2005 9,120 11,092 4,242 87,875 112,329
Net fair value adjustments on
investments not recognised
in the profit and loss
account - 248 - - 248
Transfer between reserves
on disposal of property - 52 - (52) -
Release of previously
recorded net gains on
available-for-sale assets
transferred to the income
statement on disposal - (825) - - (825)
Profit attributable
to shareholders - - - 10,219 10,219
Dividends - - - (6,473) (6,473)
At 30 June 2005 9,120 10,567 4,242 91,569 115,498
Cash Flow Statement for the period 1 January 2005 to 30 June 2005
Group Bank
6 mths to 6 mths to 6 mths to 6 mths to
30/6/05 30/6/04 30/6/05 30/6/04
Lm000 Lm000 Lm000 Lm000
Cash flows from operating
activities
Interest, commission
and premium receipts 50,554 41,826 38,015 31,331
Interest, commission
and claim payments (13,989) (15,256) (12,913) (15,148)
Payments to employees
and suppliers (15,829) (13,924) (14,902) (13,696)
Operating profit
before changes in
operating assets/
liabilities 20,736 12,646 10,200 2,487
(Increase)/decrease in
operating assets:
Trading instruments 809 (181) 809 (181)
Reserve deposits with
Central Bank of Malta 73 (964) 73 (968)
Loans and advances to banks (6,513) 2,128 (6,515) 3,405
Loans and advances to
customers (49,491) (23,540) (55,695) (32,999)
Treasury bills with
contractual maturity of
over three months 29,907 (9,551) 29,907 (7,952)
Cheques in course of
collection (866) (321) (866) (321)
Other receivables (1,031) 1,380 (938) 1,827
Increase/(decrease)in
operating liabilities:
Amounts owed to banks (22,367) 5,769 (22,367) 5,768
Amounts owed to customers 25,118 31,568 26,941 33,239
Other payables 4,578 423 4,262 (933)
Net cash from/(used in)
operating activities
before income tax 953 19,357 (14,189) 3,372
Tax paid (1,100) (1,298) (933) (1,072)
Net cash (used in)/from
operating activities (147) 18,059 (15,122) 2,300
Cash flows from investing
activities
Dividends received 25 28 325 1,328
Income received from financial
instruments designated at
fair value through profit
or loss 695 269 - -
Interest received from
available-for-sale debt
and other fixed income
instruments 3,351 2,625 3,351 2,625
Interest received from
held-to-maturity debt
and other fixed income
instruments 2,759 3,344 4,116 4,703
Proceeds on disposal
of financial instruments
designated at fair value
through profit or loss 7,463 1,341 - -
Proceeds on disposal of
available-for-sale
instruments 11,401 10,640 11,299 5,126
Proceeds on maturity
of held-to-maturity
debt and other fixed
income instruments 25,293 35,630 25,293 35,630
Proceeds on disposal of
tangible fixed assets 439 17 431 17
Purchase of financial
instruments designated at
fair value through
profit or loss (14,388) (13,047) - -
Purchase of available-
for-sale instruments (27,961) - (27,961) -
Purchase of held-to-maturity
debt and other fixed
income instruments - (51,298) - (51,298)
Purchase of tangible
fixed assets (591) (381) (584) (364)
Purchase of intangible
assets (344) (48) (52) (43)
Net cash flows from/(used in)
investing activities 8,142 (10,880) 16,218 (2,276)
Cash flows from financing
activities
Dividends paid (6,473) (5,833) (6,473) (5,833)
Maturity of subordinated
loan stock (19,914) - (20,000) -
Cash used in financing
activities (26,387) (5,833) (26,473) (5,833)
(Decrease)/increase in cash
and cash equivalents (18,392) 1,346 (25,377) (5,809)
Effect of exchange rate
changes on cash and cash
equivalents 2,588 758 2,538 541
Net (decrease)/increase
in cash and cash
equivalents (20,980) 588 (27,915) (6,350)
(18,392) 1,346 (25,377) (5,809)
Cash and cash equivalents
at beginning of period 97,051 108,019 138,108 165,217
Cash and cash equivalents
at end of period 78,659 109,365 112,731 159,408
Segmental Information
a Class of business
Personal financial Commercial Corporate, investment Group total
services banking banking and markets
6 mths 6 mths 6 mths 6 mths 6 mths 6 mths 6 mths 6 mths
to to to to to to to to
30/6/05 30/6/04 30/6/05 30/6/04 30/6/05 30/6/04 30/6/05 30/6/04
Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000
Profit before tax
Segment operating
income 16,048 15,063 11,204 10,435 6,113 4,635 33,365 30,133
Segment impairment
allowances (174) (97) 1,128 4,565 - - 954 4,468
Common costs (15,833) (14,788)
Profit on ordinary
activities before
tax 18,486 19,813
30/6/05 30/6/04 30/6/05 30/6/04 30/6/05 30/6/04 30/6/05 30/6/04
Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000 Lm000
Assets
Segment total
assets 523,987 443,742 658,005 634,696 445,456 510,717 1,627,448 1,589,155
Average total
assets 500,335 428,644 654,596 639,365 457,678 496,061 1,612,609 1,564,070
Net assets 39,961 34,726 87,235 84,292 12,153 18,359 139,349 137,377
b Geographical segments
The group's activities are carried out within Malta. There are no identifiable
geographical segments or other material concentrations.
HSBC Bank Malta p.l.c. is licensed as a credit institution and provider of
investment services by the Malta Financial Services Authority.
Registered Office: 233, Republic Street, Valletta VLT 05, Malta. Telephone:
(00356) 2380 2380
Company Registration Number: C3177
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HSBC Holdings plc
By:
Name: P A Stafford
Title: Assistant Group Secretary
Date: 22 July 2005