HSBC Bank Canada - Q1 2003 Results

16 May 2003

• Net income* was C$73 million for the quarter ended 31 March 2003, a decrease of 3.9 per cent from C$76 million in the same period of 2002.  Compared to the fourth quarter of 2002, net income was C$8 million, or 12.3 per cent, higher.
• Return on average common equity was 19.0 per cent for the quarter ended 31 March 2003 compared to 19.7 per cent for the same period in 2002 and 15.9 per cent for the fourth quarter of 2002.
• The cost:income ratio was 55.4 per cent for the quarter ended 31 March 2003 compared with 52.6 per cent for the quarter ended 31 March 2002 and 57.7 per cent for the fourth quarter of 2002.
• Total assets were C$35.4 billion at 31 March 2003 compared to C$33.9 billion at 31 March 2002 and C$35.2 billion at 31 December 2002.
• Total assets under administration were C$14.8 billion at 31 March 2003, of which C$11.5 billion were funds under management and C$3.3 billion were custody and administration accounts.

* HSBC Bank Canada acquired Merrill Lynch HSBC Canada Inc. (‘MLHSBC’) on 31 October 2002. For financial reporting, the income and expenses of MLHSBC were accounted for effective 1 July 2002, the date HSBC Group acquired full ownership of MLHSBC, and were recorded in the results for the fourth quarter of 2002.

HSBC Bank Canada recorded net income of C$73 million for the quarter ended 31 March 2003, a decrease of C$3 million, or 3.9 per cent, from C$76 million for the same quarter of 2002 and C$8 million, or 12.3 per cent, higher than the quarter ended 31 December 2002.  Excluding one-off gains and expenses, net income in the quarter was C$6 million higher compared to the same period in 2002 and C$13 million higher compared to the fourth quarter of 2002.

Higher net interest income and lower provisions for credit losses in the quarter were offset by lower other income and higher non-interest expenses compared to the same period in 2002.  Compared to the fourth quarter of 2002, higher net interest income, lower provisions for credit losses and lower non-interest expenses were partially offset by lower other income.

Martin Glynn, President and Chief Executive Officer, said: “Results for the quarter were satisfactory, given the continued uncertainty in global equity markets, and difficult economic conditions in Canada and internationally.  Solid growth in personal and commercial business volumes continued to drive our performance as evidenced by higher net interest income.  This growth also benefited non-interest revenues as other income, excluding capital market sensitive revenues and securitisation income, increased compared to the same period last year.

“A focus for 2003 is to grow our core business by capitalising on North American alignment with HSBC businesses in the USA and Mexico and by continuing to invest in improving our delivery channels and services.  Business Internet Banking was launched in the first quarter and enables commercial clients to access banking and certain trade finance services around the clock, all year round.  A key factor in the successful introduction was our ability to access the knowledge and experience of our counterparts at other HSBC companies to ensure that critical dates and milestones were met.

“HSBC Holdings plc completed the acquisition of Household International Inc. on 28 March 2003.  We are excited about the prospects of working more closely with our new colleagues in Household International as this will provide us with the opportunity to offer a wider range of financial services to an expanded base of retail and commercial customers in Canada.  In addition, there are potential cost synergies for HSBC Bank Canada by capitalising on Household’s strong credit management and technological capabilities.”

The full text of the news release can be downloaded using the link on the right.