HSBC Bank Canada results for the fourth quarter and year ended 31 December 2009 - highlights

18 February 2010

• Net income attributable to common shares was C$148 million for the quarter ended 31 December 2009, an increase of 28.7 per cent compared to the same period in 2008.
• Net income attributable to common shares was C$448 million for the year ended 31 December 2009, a decrease of 21.8 per cent compared with C$573 million for the year ended 31 December 2008.
• Return on average common equity was 17.3 per cent for the quarter ended 31 December 2009 and 13.1 per cent for the year ended 31 December 2009 compared with 12.8 per cent and 16.6 per cent, respectively, for the same periods in 2008.
• The cost efficiency ratio was 44.2 per cent for the quarter ended 31 December 2009 and 48.4 per cent for the year ended 31 December 2008 compared with 49.3 per cent and 49.6 per cent, respectively, for the same periods in 2008.
• Total assets were C$71.3 billion at 31 December 2009, a decrease of C$0.7 billion, or 1.0 per cent, from C$72.0 billion at 31 December 2008.
• Total funds under management were C$28.2 billion at 31 December 2009, an increase of C$6.9 billion, or 32.4 per cent, from C$21.3 billion at 31 December 2008.
• Tier 1 capital ratio of 12.1 per cent and a total capital ratio of 14.9 per cent at 31 December 2009 compared to 10.1 per cent and 12.5 per cent respectively at 31 December 2008.

Results are prepared in accordance with Canadian generally accepted accounting principles. 
 
Overview

HSBC Bank Canada ("the bank") recorded net income attributable to common shares of C$148 million for the fourth quarter ended 31 December 2009, an increase of C$33 million, or 28.7 per cent, from C$115 million for the fourth quarter of 2008. Net income attributable to common shares for the year ended 31 December 2009 was C$448 million, a decrease of $125 million or 21.8 per cent compared with C$573 million for 2008.

Net income attributable to common shares for the year ended 31 December 2009 from core banking operations, which consists of` Personal Financial Services, Commercial Banking and Global Banking and Markets, was C$494 million, C$30 million or 5.7 per cent lower than 2008 and from Consumer Finance was a loss of C$46 million, C$95 million or 194 per cent lower than 2008.

Commenting on the results, Lindsay Gordon, President and Chief Executive Officer, said:

"2009 saw GDP fall by 2.6 per cent, making it another challenging year for the Canadian economy, our customers and our business. In the face of these pressures, our strong capital base meant we were able to continue to focus on supporting our customers and managing our business well. Our cost efficiency ratio improved, from 49.6 per cent down to 48.4 per cent; we increased funds under management by C$6.9 billion; our tier 1 capital increased from 10.1 per cent to 12.1 per cent while our total capital ratio increased from 12.5 per cent to 14.9 per cent year on year.

"While net income was down over the year, these results show resilience given the significant market challenges. Pre-tax income from our core banking operations was less than 3 per cent lower than 2008, despite the impact of increased credit losses. Our fourth quarter results were particularly encouraging, with the strongest performance for the past 18 months. 

"Despite uncertainties ahead, the outlook for the Canadian economy is more positive in 2010 and we expect GDP growth to return to 2.4 per cent this year. Our capital and liquidity strength, combined with our conservative balance sheet, mean we are well positioned for the future, as economic conditions begin to improve".

Read the full media release (12 page pdf 197k).