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HSBC Bank Canada results for the fourth quarter and year ended 31 December 2007 - highlights
26 February 2008
- Net income attributable to common shares was C$530 million for the year ended 31 December 2007, an increase of 6.6 per cent over the year ended 31 December 2006.
- Net income attributable to common shares was C$111 million for the quarter ended 31 December 2007, a decrease of 13.3 per cent compared to the same period in 2006.
- Return on average common equity was 19.8 per cent for the year ended 31 December 2007 and 15.6 per cent for the quarter ended 31 December 2007 compared with 21.1 per cent and 20.6 per cent, respectively, for the same periods in 2006.
- The cost efficiency ratio was 51.7 per cent for the year ended 31 December 2007 and 54.5 per cent for the quarter ended 31 December 2007 compared with 51.3 per cent and 51.4 per cent, respectively, for the same periods in 2006.
- Total assets were C$62.9 billion at 31 December 2007, an increase of C$6.1 billion, or 10.7 per cent, from C$56.8 billion at 31 December 2006.
- Total funds under management were C$26.2 billion at 31 December 2007, an increase of C$2.9 billion, or 12.4 per cent, from C$23.3 billion at 31 December 2006.
Results are prepared in accordance with Canadian generally accepted accounting principles.
Overview
HSBC Bank Canada ("the bank") recorded net income attributable to common shares for the year ended 31 December 2007 of C$530 million compared with C$497 million for 2006, an increase of C$33 million, or 6.6 per cent. Net income attributable to common shares was C$111 million for the fourth quarter ended 31 December 2007, a decrease of C$17 million, or 13.3 per cent, from C$128 million for the fourth quarter of 2006.
During the year, the bank took a charge in respect of its holdings of Canadian non-bank sponsored Asset Backed Commercial Paper ("non-bank ABCP") of C$47 million (C$30 million net of related income taxes). In 2007 the bank also recorded a gain of C$21 million after related income taxes on disposal of its shares in the Montreal Stock Exchange.
Commenting on the results, Lindsay Gordon, President and Chief Executive Officer, said: "The bank's underlying business remains strong and investments in key businesses and markets are delivering growth in revenues. The liquidity problems which emerged in the Canadian Asset Backed Commercial Paper market in August posed a challenge to our industry and HSBC joined with other domestic and international banks in engaging constructively to pursue an orderly market solution to the situation. HSBC Bank Canada subsequently took some exposure onto its own balance sheet and our charge represents impairments on such positions; these positions include a very small element of exposure to the US sub-prime mortgage market which is the bank’s only exposure to that market.
"The outlook for 2008 is mixed. The Canadian economy remains resilient with strong growth in Western Canada. Both personal and commercial segments of the bank’s business remain very competitive with ongoing pressure on margins, particularly in the personal segment. The bank will stay focused on building its business for sustained growth. We see opportunities for growth across all the bank’s key business lines, and we will re-engineer key processes to further improve the quality and consistency of customer service to achieve this."
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HSBC Bank Canada results for the fourth quarter and year ended 31 December 2007 - highlights
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