HSBC Bank Canada fourth quarter 2003 results

23 February 2004

• Net income was C$73 million for the quarter ended 31 December 2003, an increase of 12.3 per cent over the fourth quarter of 2002.
• Net income was C$300 million for the year ended 31 December 2003, an increase of 15.4 per cent over the same period in 2002.
• Return on average common equity was 17.0 per cent for the quarter ended 31 December 2003 and 18.7 per cent for the year ended 31 December 2003.
• The cost:income ratio was 62.0 per cent for the quarter ended 31 December 2003 and 57.4 per cent for the year ended 31 December 2003.
• Total assets of C$37.5 billion at 31 December 2003 compared to C$35.2 billion at 31 December 2002.
• Total assets under administration were C$18.7 billion at 31 December 2003, of which C$14.3 billion were funds under management and C$4.4 billion were custody and administration accounts.

HSBC Bank Canada recorded net income of C$73 million for the quarter ended 31 December 2003, an increase of C$8 million, or 12.3 per cent, from C$65 million for the fourth quarter of 2002.  Net income for the year ended 31 December 2003 was C$300 million, an increase of C$40 million, or 15.4 per cent, compared with C$260 million for the year ended 31 December 2002. 

Commenting on the results, Lindsay Gordon, President and Chief Executive Officer, said: “Overall, given the challenges we faced, we are encouraged by the results for the quarter and for the year ended 31 December 2003. Our personal and commercial banking customers helped us to weather a number of negative events such as the SARS outbreak, ‘mad-cow’ disease, forest fires in British Columbia and the electricity blackout in Ontario, as well as uncertainty in the world economy throughout most of the year.
 
“Net income benefited from an improved credit environment over the course of 2003 which resulted in lower credit losses compared with 2002.  Personal loans and residential mortgages continued to grow as a result of lower interest rates and an active housing market.  However, the net interest margin continued to be negatively impacted by competitive pricing.  Other income increased, driven by higher capital market fees as North American equity markets rebounded in 2003.

“The excellent customer service we seek to provide our customers is one of our competitive advantages.  I am pleased to report that HSBC Bank Canada was rated the highest for overall quality of customer service to the small and medium-sized enterprise (SME) market amongst all major chartered banks included in ‘Banking on Competition: Results of CFIB Banking Survey’.  This is an independent survey of SME owners conducted by the Canadian Federation of Independent Business (CFIB) and was published in October 2003.  The results re-affirm our top position in a similar survey completed by the CFIB in 2000.  This distinction could only have been achieved through the hard work and customer focus of our staff.

“In 2004, we will continue to focus on our core businesses to sustain growth in revenue, ensure a consistent control of costs and efficiently manage our capital resources.  We will also continue to operate under a framework of prudent risk management and maintain our tradition of excellent corporate conduct.  We are well-positioned to benefit from any growth in the world economy in 2004 through our broad range of products and services, and by taking advantage of the capabilities of our colleagues in the US, including Household International, and at HSBC in Mexico.”

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