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28 Apr 2008

Grupo Financiero HSBC, SA de CV first quarter 2008 financial results – highlights

  • Net income for the first quarter of 2008 was MXN2,207 million, up MXN796 million, or 56.4 per cent, compared with MXN1,411 million for the same period in 2007. 
  • Total operating income (excluding loan impairment charges) for the first quarter of 2008 was MXN9,638, up MXN1,567 million, or 19.4 per cent compared with MXN8,071 million for the same period in 2007.
  • Net loans and advances to customers were MXN191.4 billion at 31 March 2008, up MXN28.4 billion, or 17.5 per cent, compared with MXN162.9 billion at 31 March 2007.
  • Total customer demand and time deposits were MXN259.0 billion at 31 March 2008, up MXN44.7 billion, or 20.9 per cent, compared with MXN214.3 billion at 31 March 2007.
  • Cost efficiency ratio* improved to 54.0 per cent for the first quarter of 2008, compared with 59.8 per cent for the same period in 2007.
  • Return on equity was 23.4 per cent for the first quarter of 2008 compared with 16.5 per cent for the same period in 2007.

HSBC Mexico S.A. (the bank) is Grupo Financiero HSBC, S.A. de C.V.'s (HSBC) primary subsidiary company and is subject to supervision by the Mexican Banking and Securities Commission. The bank is required to file periodic financial information on a quarterly basis (in this case for the quarter ended 31March 2008) and this information is publicly available. Given that this information is available in the public domain, Grupo Financiero HSBC, S.A. de C.V. has elected to file this release.

*Results are prepared in accordance with Mexican GAAP (Generally Accepted Accounting Principles).  Beginning January 1, 2008, in accordance with Financial Information Standard B-10, "Effects of Inflation", the effects of inflation in financial statements shall no longer be recognized. This is due to the change from an inflationary to a non-inflationary economic environment. The comparative figures of the financial statements of periods prior to 2008 are expressed in monetary units with purchasing power at December 31, 2007.

Grupo Financiero HSBC, S.A. de C.V. is a 99.99 per cent directly owned subsidiary of HSBC Holdings plc (HSBC Group).

Commentary by Paul Thurston, CEO of Grupo Financiero HSBC:

"Grupo Financiero HSBC continued to build our business in Mexico in the first quarter of 2008, increasing our customer base, growing our business volumes, and investing for future growth. Net income of MXN2,207 million was up 56.4 per cent on the same period in 2007. 

"Our aim is to become the leading financial services company in Mexico, and we are working hard to strengthen our customer service platform, improve our operating efficiency and manage our portfolio more effectively. Sustainable growth of our business will benefit our customers, employees, shareholders and the local community, and contribute to the development of the Mexican economy.

"By March 31, 2008, our customer base had increased by more than 1.1 million customer accounts year-on-year, through growth in the number of Premier customers and the continued success of the Tu Cuenta packaged product. Customer deposits grew by more than 20 per cent year on year. We are also increasing cross sales in key customer segments, and growing our insurance premium income by leveraging our bancassurance model to provide insurance solutions to more existing and potential customers.

"We continued to invest in growing our consumer and commercial credit businesses.  Compared to the same period in 2007, credit card balances increased 61 per cent year-on-year to MXN28.3 billion while personal loan and payroll loan balances increased by 48.1 per cent, to MXN8.2 billion. In our commercial business, the commercial portfolio grew by 13.0 per cent to MXN71.3 billion. 

"Through continuing to attract new customers, and strengthening our relationships with existing customers, revenues continued to grow strongly, up 19.4 per cent compared to the same period in 2007. This allowed us to absorb the related increase in loan impairment charges, which are a consequence of the investment we are making in building our loan portfolios.

"We continue to invest in building our business organically and improving our business platform. In the past 12 months, we have installed 373 additional ATMs and we are making significant investments to improve the technological infrastructure. We are also investing in streamlining our processes and modernising our branches, which will allow us to increase capacity and improve customer service. Revenue growth exceeded cost growth, which improved the cost efficiency ratio to 54.0 per cent compared to 59.8 per cent in the first quarter of 2007.

"Our net income was positively impacted by the receipt of the proceeds of the sale of stock in Visa Inc, resulting from that company's IPO, and this has supported further investment in our business.

"In the area of corporate responsibility, I am pleased to report that in March 2008 HSBC Mexico was awarded, for the third consecutive year, the "Socially Responsible Company" certification by the Mexican Philanthropy Centre (CEMEFI) and Aliarse. The Certification was granted to HSBC Mexico after a lengthy due diligence process, where HSBC Mexico had to document its commitment to the highest standards of social responsibility in the areas of quality of life within the company, business ethics, community involvement and conservation of the environment."

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