HSBC Bank Malta announced that, in line with the HSBC Group’s drive to improve its organisational effectiveness and against the background of difficult market conditions, it will be rolling out a plan to deliver sustainable cost savings.

As announced last month in its Interim Directors’ Statement, HSBC expects 2012 to be a more difficult year due to increasing pressures on revenue and capital. Consequently, the Bank is positioning itself to ensure strong ongoing productivity and cost effectiveness. This clear strategy will ensure that current levels of profitability and growth remain sustainable.

Part of this strategy will include the phasing out of six branches, and a reduced service proposition at one branch and two agencies over a period of the first six months of 2012. Notwithstanding the plan to resize the branch network footprint, HSBC Malta will continue to progress the €11 million project investing in upgrading the rest of the branch network and to further improve the automated delivery channels. Over the past year and a half, HSBC has refurbished and re-opened 10 branches in Bugibba, Hamrun, Swieqi, Paola, Valletta Premier Centre, Zejtun, Mosta, Zurrieq, San Gwann and Birkirkara. The Bank has announced also that it is installing next-generation ATMs across its network in Malta and Gozo for faster self-service transactions – an investment of more than €3 million in this new technology.

Over the past year, the bank has seen a 14% reduction in teller activity which reflects a rapid change in customer behaviour. Reliance on faster and more efficient services through internet banking, phone banking and automated services such as ATMs and deposit machines is diverting people’s dependence on being served physically within branches. As a result of such developments, branches are being transformed into places where customers visit when they need more personalised attention and for discussions to take place in relation to planning their financial future, rather than for transactional purposes. After very careful consideration and in line with this changing customer behaviour and the need to increase the bank’s organisational effectiveness, HSBC Malta will, by next February 15, close down branches in Msida, Santa Venera, Naxxar and Attard. Branches in Manwel Dimech Street in Sliema and in Luqa will close down on March 15. As of February 15, the Gozo-based agencies in Nadur and Xaghra will also offer reduced service by appointment. The HSBC branch on Campus at University will also run on reduced service starting from June 30.

Accounts held in these branches will be seamlessly transferred to the nearest branches. The Bank is committed to ensure that customers will still be able to carry out transactions via ATMs and deposit machines which will remain in place even where branches will close down, whilst in some cases new ATMs and deposit machines will be installed in the locations previously used as branches or agencies. Customers affected by these changes will be notified in the coming weeks by means of a letter sent to their household or business. This restructuring will not involve staff compulsory redundancies, but through consultation with MUBE and as communicated to HSBC staff, the employees may apply for the voluntary redundancy/ early voluntary retirement schemes currently on offer.

“Given the increasingly challenging economic and market conditions in Europe and in order to ensure the Bank maintains current levels of performance in the medium term, the Board has recently approved a plan to deliver additional cost savings by the end of 2013. A key initiative is the further optimisation of the branch network footprint. This in part reflects changing customer behaviour and the increasing popularity and convenience of HSBC’s automated services,” said Alan Richards, Chief Executive Officer of HSBC Bank Malta.

“Malta is an important market for HSBC and whilst closing a branch or reducing the range of services is not popular, the decisions are only taken after very careful consideration of customer activity, demographics and proximity to other branches. Whilst we will continue to provide automated services in all current locations, we will in the new year phase out six branches and reduce service at one further branch and two agencies. At the same time we remain committed to an ongoing €11 million investment programme to refurbish and upgrade key branches and automated facilities. Needless to say, we will do all we can to minimise any impact on customers during the transition period,” he said.

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