“The contribution of the Energy and Water Agency as a lead partner was important in raising awareness on the importance of, among others, water conservation, waste management and reduction, and sustainable development,” HSBC says in the press statement.

Greening The Islands is an innovative organisation supporting the self-sufficiency and sustainability of islands worldwide, and focussing on enabling cooperation between local authorities, businesses, citizens and academia.

As part of HSBC’s Global Water Programme, the bank has invested close to €1m in water and other sustainability initiatives in the island nation, such as Catch the Drop, Water Explorer, and the Malta CSR Institute – Together for Sustainability.

HSBC Malta also supports the Malta CSR Institute that has recently launched the Business Against Food Waste, helping restaurants to better manage food supplies; and Invest+, a series of financial literacy workshops organised with the Malta Business Bureau.

The post HSBC Malta bags Public Awareness award first appeared on The Malta Business Weekly.

Mr Beane says that the closure of the branches comes after the local board had spent quite some time analysing the changing behaviour of HSBC Malta customers, as well as the emerging technological solutions reshaping the banking industry globally — one vertical of many, if not all, that is being upturned by connectivity on the go and top-notch tech at our fingertips.

“Customers are leading different lives. People are now globally doing 80% of their transactions digitally. In Malta, this translates to a 60% year-on-year increase, and a 10% year-on-year decrease in traditional transactions. You have to organise your business around that,” Mr Beane tells Business Malta. In fact, HSBC Malta has recently revamped its mobile application, launched a new internet banking platform and has streamlined the onboarding process of new customers.

Despite technology storming into industries and forcing businesses to rethink operations at their core, the HSBC Malta CEO says that branches will not go extinct in the future. “It is not our vision that banks will become totally digital. Actually, I think successful banks will be a blend of the best of digital and the best of human beings. Branches will remain important.”

“We have looked at the range of services that we want to offer and we have looked at the cost that we can afford to invest in them. This is a considered strategic decision by the local board.”

HSBC Malta CEO Andrew Beane

Nevertheless, he insists HSBC Malta envisages a banking landscape offering a fine balance between more digital services and less — but more efficient — physical branches.

“The branches that we have will be different; I genuinely believe in a better way for customers and colleagues. There will be a number of roles that we will reduce, but that will be on a voluntary basis; which means that it is subject to discussion with the Malta Union of Bank Employees [MUBE], which we can only start now,” according to the CEO.

“It is about having better branches, but less of them in an absolute sense. What you will see when you see our flagship branch in Qormi next year that it will be different with more services and more flexibility. I think it will have a better customer experience to it. So it is not as simple as saying some branches are closing, actually it is about building a sustainable model for the future,” Mr Beane adds.

Keeping staff in house

Closures always create inflated headlines, especially in business news. While such news can easily cause concern among investors, it can also jolt staff working at the closing-down facilities into insecurity about their future. Still, Mr Beane tells Business Malta that HSBC is negotiating with MUBE, and is ready to assist staff through this period.

“Colleagues, if they are interested in, applying for early retirement can do so. No one will be asked to do what they do not want to. If somebody works in an area that is changing and they do not want to do that, we would work with them to allocate them for a new job in the organisation,” the HSBC Malta CEO says.

When asked whether the bank would consider training colleagues to fill new roles in the organisation, the CEO did not sweep the idea off the table. “We are delighted to work with people and teach them new skills and help them grow and flourish as individuals.”

Nevertheless, the CEO did not give a figure on how many people might be affected in the seven branches that are closing down — as the Balzan branch is said to be merging with a “flagship” branch being established in Qormi.

“We have only just started the negotiation with the union and we want to respect their opinion. At the same time, as I mentioned before, the programme will be voluntary” and at this point, it is yet unclear what the intentions of staff will be.

When asked whether it is coincidental that HSBC Malta’s announcement of closing branches comes after the Financial Times reported that HSBC could be laying off 10,000 people globally, Mr Beane insisted that the decision was a local one.

“This is a decision that the board has been thinking about for some time. One of the board’s roles is to look at the macro trends that are changing the way that the customers behave. We have looked at very carefully how digital trends that we have seen in other countries are now affecting Malta,” Mr Beane says.

“We have looked at the range of services that we want to offer and we have looked at the cost that we can afford to invest in them. This is a considered strategic decision by the local board,” Mr Beane concludes.

In a recent editorial, the Financial Times says that it appears to be in the HSBC group’s “DNA to be ahead of the curve” in crucial decisions players of the banking sector would need to make related to changing customer behaviour and changing economic trends. “All of that comes on top of slowing global growth and the mounting pressure on lending margins from looser monetary policy,” the Financial Times editorial says.

The post HSBC Malta CEO says ‘strategic considerations’ lead to closures, insists on ‘voluntary’ job reductions first appeared on The Malta Business Weekly.

“The bank expects, subject to MUBE [Malta Union of Bank Employees] agreement, a reduction in roles within the organisation on a voluntary basis. The restructuring costs to deliver these changes will be booked in the 2019 financial results but as the programme is voluntary, the amount will depend on the number of applications,” the press statement says.

Seven branches will be closed in Birżebbuġa, Cospicua, Fgura, Ħamrun, Marsascala, St Julian’s and St Paul’s Bay. The “flagship” branch in Qormi is scheduled for opening in 2020, and is expected to bring together HSBC Malta’s existing Qormi and Balzan branches. The Balzan branch will close, while the new branch in Qormi aspires to be the largest HSBC branch in Malta.

HSBC Malta added that branches in Valletta, Mosta, Paola, Sliema and Victoria (Gozo) will provide more services, while self-service ATM and deposit machines will continue operating in the localities seeing the closures.

At the same time, HSBC Bank Malta Plc has announced a strategic plan to “increase its focus on digital banking services and to modernise its branch network,” which plan is expected to “maximise the opportunities from the rapidly changing way customers are using banks.”

‘Right actions’

“With the closure of some branches, this [modernisation of branch network] will all be delivered through a more cost-effective operating model which will help us mitigate the long-term impact of negative interest rates on the bank’s profitability in Malta,” said Andrew Beane, Chief Executive Officer of HSBC Bank Malta Plc.

“Customers are changing the way they use financial services and HSBC Malta is taking the right actions to respond to this. We are delivering enhanced digital solutions, a modernised branch network with new wealth management centres, and more flexible access to a range of self-service solutions,” the CEO added.

HSBC Malta says that recently it has invested in its digital capabilities, the new “flagship” branch to open soon in Qormi, the development of new wealth management centres, and more flexible access to a range of self-service solutions delivered through a more “cost-effective” operating model. The bank hopes to help mitigate the long-term impact of negative interest rates on the bank’s profitability through the aforementioned steps.

HSBC Malta adds that research by the group shows that globally, 80% of banking transactions are completed digitally, with 45% on mobile devices. Additionally, data gathered by HSBC Malta indicates that Maltese customers’ use of traditional banking services is reducing by more than 10% per annum while mobile usage is increasing 65% each year.

“Branch banking will continue to be a critical part of HSBC Malta’s service offering for the long term. However, what branches do for their customers and how and when they do it is changing,” HSBC Malta says in the press statement.

EDITORIAL NOTES: The original lead has been rephrased in order to offer more information about the closures and the digital transformation HSBC Malta is planning.

Clarification about the closure of the Balzan branch and the merger of its staff with the Qormi “flagship” branch has also been added.

The headline has also be revised from closing seven branches to eight, dut to the merger of the Balzan branch into the Qormi branch. The crosshead of “Right actions” has also been added.

The post HSBC Malta to close 8 branches, open ‘flagship’ branch in Qormi first appeared on The Malta Business Weekly.

As mortgage debt makes up a big share of the total debt of households in the euro area, understanding the implications of indebtedness, for instance, is one important aspect of financial literacy. Supported by higher levels of financial literacy, individuals are more likely to enhance their decision-making process related to their financial responsibilities.

Therefore, the Invest+ project run by MBB aims to educate people through mentoring sessions and workshops on finance, accounting, savings and investment, aspiring to make participants become financially independent on both personal and professional levels by providing them with a broad understanding of underlying crucial concepts.

HSBC Malta believes that investing in the community is important for running a sustainable business, as well as it is essential for helping people make good life choices in their personal lives, HSBC CEO Andrew C Beane said. The CEO noted that not everybody has access to such information, therefore he believes that initiatives similar to Invest+ are very important. HSBC Malta is making its own experts available for the project who will act as mentors.

MBB President Simon De Cesare underscored the importance of such initiatives related to policy areas and promoting measures that support education. He said that financial literacy is crucial for many reasons; such as helping people understand what indebtedness means, and it can also help in mitigating social issues such as poverty, inequality, social exclusion and social immobility.

Invest+ is a development of Invest, which was originally launched through an Erasmus+ project and has created an e-learning toolkit that is still available for free for anyone. As the Erasmus+ project ended in 2018, recently-launched Invest+ is aspiring to go further to reach wider audiences; not only targeting businesses but also the general public. Mr De Cesare emphasised that well-informed individuals can make better choices and be agents to promote a wider change.

Through the application process — that is open to everyone — the applicant can enter what they would like to achieve and what they would like to gain through this educational experience, so the organisers can assess the needs of the participants and shape up the educational material accordingly, Invest+ Project Manager Marija Elena Borg said. The project aims to include 140 participants, nevertheless, Ms Borg said that the project can cater for more people.

The mentoring sessions are broken up into four modules, in the organisation of educational institutions as well as entrepreneurial and social platforms. During the study visits, participants will be able to attend events in Brussels during the 2020 European Money Week. Workshops will be lead by financial mentors organised in social settings in order to create forums of discussion. Concluding the project, the national conference will evaluate the progress and look into how obtained results can be sustained in the future.

Intended outputs of the project — immediate results right after the end of the project — include:

• participants understanding the difference between financial needs and wants,
• participants understanding the difference between the concepts of inflation and deflation,
• participants understanding how to properly read bank statements,
• participants understanding how to establish a savings plan and achieve financial goals.

Intended outcomes of the project — mid-terms results right after the end of the project — include:

• participants become able to reduce their debt levels,
• participants can increase rates of savings.

As part of INVEST+, the Malta Business Bureau is now receiving applications for its mentoring programme on financial literacy. Interested individuals are required to fill in this application form and send it in an email to MBB.

EDITORIAL NOTE: The present story has been updated with further details related to the intended outputs and outcomes of the project, as well as the timeline infographic has been slightly revised visually. The lead has been rephrased and background to the current financial literacy situation in the area has been added.

The most recent update of the article has seen the addition of further information about the application process.

The post HSBC, MBB launch Invest+ financial literacy project first appeared on The Malta Business Weekly.

Common equity Tier 1 capital ratio rose to 16.2% by the end of H1, up from 14.6% at the end of 2018, which the bank says is “well above regulatory requirements”. The total capital ratio increased to 18.8% compared to 17.0% on 31 December 2018.

HSBC Malta’s cost efficiency ratio improved to 73% by end-June from 74% for the same period in 2018. However, return on equity dropped to 5.8% for the six months ended 30 June 2019, from 6.1% for the same period in 2018.

Net loans and advances to customers were up by €73m to €3.183b, as compared to 31 December 2018 with strong growth across the RBWM mortgage portfolio and marginal growth in the commercial lending book.

Customer deposits, however, dropped by 1% €38m to €4.850b compared to 31 December 2018 with increases in retail deposits offset by a reduction in commercial banking deposits. The bank says it maintained a “healthy” advances-to-deposits ratio of 66% and its liquidity ratios were well in excess of regulatory requirements.

The bank’s financial investments portfolio increased by €53m to €958m and composed of highly-rated securities and is conservatively positioned with the lowest investment grade of A-, the press statement sent to BM says.

Profit attributable to shareholders amounted to €13.6m resulting in earnings per share of 3.8 cents compared with 4.0 cents in the first half of 2018. The board proposes to maintain the current dividend payout ratio of 30% and recommends an interim gross dividend of 1.7 cents per share — 1.1 cents per share net of tax. The interim dividend will be paid on 18 September to shareholders who are on the bank’s register as at 16 August.

‘Good set of results’

“These are a good set of results as the bank emerges from the implementation of its successful risk management strategy with increasing momentum. Strategically we are now focused on the delivery of world-class customer service to support growth,” said Andrew Beane, Director and Chief Executive Officer of HSBC Bank Malta Plc.

“Progress in retail banking is ahead of expectations with significant market share gains achieved in new customer acquisition and home loans without increasing risk appetite. Retail banking will also benefit from a number of digital innovations the bank will launch in the second half of the year,” the CEO added.

Net interest income (NII) decreased marginally to €53.6m compared with €54.1m in the same period in 2018 with contraction in the commercial bank loan book interest and a further decline in the average yield on the investment book. The decline was largely offset by the growth in NII within the mortgage book and effective management of excess liquidity, HSBC says.

Non-interest income (fees and commissions and trading income) dropped by €0.6m, which is largely driven by a reduction in fees due to the disposal of a specific insurance portfolio in December 2018 and a reduction in management fees within the Asset Management Company partly offset by strong performance in foreign exchange.

HSBC Life Assurance Malta Ltd reported a profit before tax of €2.4m, some 39% higher than the same period of 2018. The increase was partly driven by positive market movements in 2019 which were not seen in the first half of 2018. In addition, the insurance subsidiary registered a 2% increase in premium income, as a result of the growth in pensions posts the launch of the new Employee Pension Plan to all HSBC Bank Malta employees in December 2018.

“Following completion of significant risk management actions, commercial banking has now stabilised and the performance of our insurance company improved. Both of these divisions require further work to increase profitability and are a strategic focus for the board. We have launched a quarter of a billion euro lending fund to signal to the market that our commercial division has returned to a growth focus,” the CEO said.

Dropping expenses

Operating expenses dropped by 2% to €53.6m compared with €54.9m in the same period in 2018. HSBC says that this reduction reflects the bank’s continuous focus on cost control and the implementation of initiatives at cost base streamlining through outsourcing and processes optimisation.

Expected Credit Loss (ECL) was a release of €1.0m versus a charge of €3.4m in 2018. Results of the first half benefited from the non-reoccurrence of the significant ECL seen in 2018. The bank says it continues to maintain a conservative provisioning approach. Overall asset quality remained satisfactory and total nonperforming loans further declined from €136m to €125m during the first six months of 2019.

“Progress on costs is encouraging and the bank is committed to further reduce its cost-efficiency ratio over time. Additionally, HSBC’s signature credit discipline has delivered further reductions to the risk profile of our portfolio. While Malta’s economic performance and outlook remain positive, we are positioning the bank for the long-term economic cycle and remain cautious in growing exposure to higher risk sectors such as corporate real estate,” Mr Beane said.

“We welcome actions being taken by the local authorities to reform corporate insolvency practices and augur this be completed at pace. The bank’s capacity to better use its capital to support lending into the economy and, if appropriate, higher dividends will significantly increase once these reforms are concluded,” the CEO he added.

The effective tax rate in the first half of the year came to 35%, which translated into a tax expense of €7.3m, some €5.5m higher than the same period in 2018. During the first six months of 2018, the bank benefited from a specific tax treatment applied on a one-off transaction.

“Finally, as is the case with all Domestic Systemically Important Banks in the Single Supervisory Mechanism, HSBC is in early-stage discussions with the European Central Bank Single Resolution Board to understand the requirements that will apply for new Required Eligible Liabilities, commonly known as MREL. MREL is likely to further increase capital requirements for the sector and the bank intends to provide more detail with the 2019 annual results as these requirements become clearer,” Mr Beane concluded.

EDITORIAL NOTE: The present article has been updated by adding HSBC Malta CEO Andrew Beane’s photo as the cover picture.

The post HSBC Malta’s pretax profit jumps 30% to €20.9m in H1 first appeared on The Malta Business Weekly.

“With Michel, Joyce and Gerard’s appointments we are clearly signalling that following completion of our successful risk management programme, HSBC is now increasing focus on growth. I am also proud that in line with our merit-based commitment to diversity and inclusion, two of HSBC’s three business divisions are led by talented female executives,” said Andrew Beane, HSBC Malta’s Chief Executive Officer.

Appointed Chief Risk Officer in April 2013, Ms Grech has worked with HSBC for 22 years. During her career, she has undertaken a number of roles, principally in Malta. She started her career in trade finance and commercial banking before moving to the bank’s credit department where she spent over five years, the last three of which as Deputy Head of Credit. Before taking up her role as Chief Risk Officer she worked in the bank’s retail banking and wealth management division where she headed the customer value management department.

In her new capacity, Ms Grech will lead the commercial banking business to deliver products and services to the bank’s diverse business customers, supporting them locally and internationally.

“I am very excited at this opportunity to support our business customers directly, helping them to achieve their aspirations. My intention is to work more closely with our customers and to employ our resources in ways which help us better understand their needs and, using the HSBC Group’s international reach and capabilities, deliver products and services to them to meet those needs,” Ms Grech said.

Mr Walsh is originally from South Africa and served previously as Chief Risk Officer for HSBC Mauritius before joining HSBC in Malta as Head of Risk Governance and Lending Services in 2018. He has been with HSBC since January 2007 and during his tenure as Chief Risk Officer, in the Mauritius office, covering both the domestic and offshore operations. Mr Walsh is a certified anti-money laundering specialist. He will build on strong risk management practices already in place, ensuring that growth is achieved in a safe and sustainable manner.

“I am delighted to join the Bank’s executive management team and look forward to working with the retail and commercial businesses in partnering for growth, to support Maltese corporates and individuals in achieving their aspirations,” Mr Walsh said.

Mr Cordina started his banking career in 1981 with Mid-Med Bank Limited and HSBC in 1999. He has worked in various areas of banking in both personal banking and commercial banking business units. He has also led a number of operational and support functions of the bank. Mr Cordina has occupied various executive roles within HSBC Malta including, Deputy Head of Operations and Head of Business Transformation. He was also the programme manager responsible for bringing the HSBC UK 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 will work to develop the bank’s business with its primary clients and external stakeholders as it focuses on a balanced return to growth. Facilitating growth in HSBC’s corporate business will be a particular priority.

“I am honoured and privileged to be appointed as a Director on the bank’s Board and very excited to take on this new executive role in my more than 37-year-long association with the bank. I am fortunate to be part of the HSBC Group and I look forward to strengthening our business in Malta and connecting our customers to opportunities, both locally and internationally, enabling them to thrive and supporting the Maltese economy to prosper,” Mr Cordina said.

HSBC Malta appointed Michel Cordina as Executive Director and as the bank’s first Executive Head of Business Development in May. Michel Cordina was Head of Commercial Business for the past eight years, prior to moving his current position.

The post HSBC Malta names new commercial head, new risk chief first appeared on The Malta Business Weekly.

The first launch of the enhanced features will consist of a new login process, which the bank says will be simpler, however, not at the cost of security. Customers will also access a simpler account selection, a redesigned menu for quick links and a slicker transaction history screen. For now, all other internet banking functions will remain as they are, and users link to the new features through the new quick links menu.

The bank says that customers will be contacted on an individual basis as soon as they have been migrated to the new platform. Nevertheless, HSBC Malta once again underscores that HSBC Malta will never ask for confidential information or confirmation of any security details, and links shared by the bank will only take users to information pages.

Once migrated, customers that are on the new platform will see a new login page which will only ask for their username. The bank says users will only need to follow the new log-in journey, promising that the new approach will not be more complex.

Customers will also be provided with a set of frequently asked questions (FAQs) to ensure that the transition simple. Furthermore, those customers who have been moved on to the enhanced service may contact the HSBC Malta Contact Centre or check the HSBC Malta Facebook page to obtain any required support or assistance as required.

The post HSBC Malta rolls out new internet banking platform in phases first appeared on The Malta Business Weekly.