16 November 2007
- Profit before taxation of MYR720 million up MYR14 million, or 1.9 per cent, for the nine months ended 30 September 2007 compared with MYR706 million for the same period in 2006.
- Profit before allowance for losses on loans and financing of MYR946 million up MYR164 million, or 21.0 per cent, for the nine months ended 30 September 2007 compared with MYR782 million for the same period in 2006 mainly attributable to the following:
- Revenue of MYR2.4 billion up MYR308 million, or 14.7 per cent, for the nine months ended 30 September 2007 compared with MYR2.1 billion for the same period in 2006.
- Net interest income of MYR828 million up MYR105 million, or 14.6 per cent, for the nine months ended 30 September 2007 compared with MYR723 million for the same period in 2006.
- Income from Islamic banking operations of MYR174 million up MYR51 million, or 41.1 per cent, for the nine months ended 30 September 2007 compared with MYR123 million for the same period in 2006.
- Allowance for losses on loans and financing of MYR226 million up MYR151 million, or 201.3 per cent, for the nine months ended 30 September 2007 compared with MYR75 million for the same period in 2006.
- Cost efficiency ratio for the nine months ended 30 September 2007 improved to 42.9 per cent from 45.7 per cent for the same period in 2006.
- Total assets of MYR44.8 billion up MYR3.8 billion, or 9.2 per cent, at 30 September 2007 compared with MYR41.0 billion at 31 December 2006.
HSBC Bank Malaysia Berhad has reported solid growth in revenue of 14.7 per cent and profit before allowance of 21.0 per cent for the nine months ended 30 September 2007 compared with the corresponding period last year. This is mainly attributable to growth in all major income streams, including net interest income, trading income and income from Islamic banking operations. Growth in pre-tax profit for the nine months ended 30 September 2007 was a moderate 1.9 per cent, or MYR13 million, compared with the same period in 2006 as a result of higher allowance for losses on loans and financing primarily due to higher impairment allowances against corporate lending.
Higher net interest income for the first nine months of 2007 was principally driven by year-on-year growth in lending of MYR2.7 billion, or 11.0 per cent, while income from Islamic banking operations rose strongly, by 41.1 per cent against the same period last year, due to growth in finance income from consumer credit and hire purchase financing.
Other operating income for the nine months ended 30 September 2007 grew 10.1 per cent compared with the corresponding period in 2006. This was mainly as a result of higher foreign exchange profits due to volatility of the Malaysian ringgit and further liberalisation of the Central Bank's foreign exchange administrative rules which resulted in higher hedging activities by corporate customers.
Other operating expenses for the first nine months of 2007 increased by 8.2 per cent, or MYR53 million, against the same period last year mainly due to higher personnel costs and inter company expenses.
The cost efficiency ratio for the nine months ended 30 September 2007 improved to 42.9 per cent from 45.7 per cent for the same period in 2006. This was a result of strong growth in all major income streams while other operating expenses grew at a slower pace.
Profit before tax of MYR226 million for the three months ended 30 September 2007 decreased by MYR67 million, or 22.9 per cent, compared with the corresponding period last year. This was primarily attributable to an exceptional profit of MYR35 million gained from the disposal of a merchant acquiring credit card business in July 2006 to a joint venture between HSBC and Global Payments Inc, coupled with higher individual impairment allowances against consumer lending, as well as increased general impairment allowance due to the expanded loan base.
Total assets at 30 September 2007 grew by MYR3.8 billion, or 9.2 per cent. This was mainly attributable to increased corporate lending, up MYR2.7 billion, or 10.1 per cent compared with 31 December 2006. Customer deposits of MYR35.9 billion at 30 September 2007 increased by MYR4.1 billion, or 11.3 per cent, compared with 31 December 2006 as a result of the bank's continuous efforts to raise Premier and demand deposits.
Irene Dorner, deputy chairman and CEO of HSBC Bank Malaysia Berhad, commented: "Amidst an increasingly competitive banking environment, HSBC Bank Malaysia Berhad continues to show robust growth in all major income sources as well as balance sheet size. The Bank will continue its broad-based growth strategy with a focus on higher potential areas such as Islamic financing and SMEs.
"The Bank is well positioned to capitalise on business opportunities arising from the progressive liberalisation of the local finance service sector. It will continue to strengthen and broaden customer relationships, improve product and service quality, and provide value-added services to ensure HSBC Bank Malaysia Berhad is the best place to bank for our customers. In 2006 and early 2007, the Bank set up four new branches in Malaysia which further strengthened our branch network to 40 and expanded our geographical reach to a wider customer base.
"In view of the strong local economic fundamentals such as benign inflationary trend, low unemployment and a strong current account balance, the Malaysian economy is expected to grow at 6 per cent in 2007 and further strengthen to 6-6.5 per cent in 2008. The Bank is well positioned to explore and capture new business opportunities in the potential growth areas by leveraging on our strong brand, global network and expertise in the banking industry."
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