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29 Nov 2010

HSBC Bank Malaysia Q3 2010 results

  • Profit before tax for the nine months ended 30 September 2010 was MYR802 million, 27.2 per cent higher than the MYR631 million reported for the same period in 2009.
  • Operating income grew to MYR1.813 billion, an increase of MYR164 million or 10.0 per cent compared with the same period in 2009.
  • Loan impairment charges and other credit risk provisions decreased by MYR39 million or 19.3 per cent to MYR165 million for the nine months ended 30 September 2010, compared with the same period in 2009.
  • The cost efficiency ratio for the nine months ended 30 September 2010 improved to 46.6 per cent from 48.8 per cent for the corresponding period in 2009.
  • Total assets of MYR59.5 billion at 30 September 2010 were up 8.0 per cent from MYR55.1 billion at 31 December 2009.
  • The core capital ratio and risk-weighted capital ratio (net of proposed dividends) were 9.8 per cent and 14.2 per cent respectively at 30 September 2010, compared with 10.2 per cent and 14.8 per cent respectively at 30 September 2009.

 

The financial statements of HSBC Bank Malaysia Berhad have been prepared in accordance with the applicable approved accounting standards issued by the Malaysian Accounting Standards Board.

Commentary

Mukhtar Hussain, Deputy Chairman and Chief Executive Officer of HSBC Bank Malaysia Berhad and Global CEO, HSBC Amanah commented:

"The improvement in the bank's results for the nine months ended 30 September 2010 is a reflection of the robust economic activity in Malaysia and the normalisation in interest rates over the past few months. 

"We remain optimistic on the bank's prospects as Malaysian exports are experiencing a strong rebound while domestic consumption continues to be on an uptrend. As the world economy recovers, we will continue to invest in our business, with special focus on network expansion to meet growing demand for banking and financial services. We are confident that the country's Economic Transformation Programme ("ETP") will help reshape the Malaysian economy as a number of high impact projects have been earmarked for implementation under this programme. The ETP is expected to generate more economic activities, as well as build up the demand for credit and the need for other banking services, and we are well positioned to capitalise on these opportunities."

Financial Commentary

HSBC Bank Malaysia Berhad achieved profits before tax of MYR802 million in the first nine months of 2010, up 27.2 per cent compared with the same period in 2009. This is a reflection of our continuing investment in the growth of the business and the robust growth of the Malaysian economy in the period.

Operating income grew by MYR164 million or 10.0 per cent compared with the same period in 2009. This was mainly due to an increase in trading profits of MYR74 million, up 21.5 per cent; an increase in net interest income of MYR56 million, up 7.3 per cent; an increase in income from Islamic banking of MYR34 million, up 17.0 per cent; and an increase in net fee income of MYR27 million, up 9.2 per cent. These increases were partially offset by a decrease in gains on disposal of available-for-sale financial investments of MYR22 million.

Trading profits continued to benefit from favourable market conditions and also from sales of financial assets held-for-trading, while net interest income improved from a combination of growth in loans and advances and the higher Base Lending Rate.

The growth in Islamic banking income reflects our ongoing investment in the development of this business, with the increase mainly due to substantial growth in Islamic advances and financing balances as well as the increase in the Overnight Policy Rate.

Net fee income grew primarily on higher sales of third party unit trusts and higher service charges. 

Other operating expenses for the nine months ended 30 September 2010 increased by 5.2 per cent or MYR42 million to MYR846 million compared with MYR804 million for the same period in 2009, primarily due to higher general administrative expenses (up MYR21 million or 9.2 per cent) and promotion and marketing expenses (up MYR14 million or 26.4 per cent). General administrative expenses were higher due to business development investment, including the opening of new branches.
 
The cost efficiency ratio for the nine months ended 2010 improved to 46.6 per cent from 48.8 per cent in the same period last year as growth in operating income outpaced the increased expenditure.

Loan impairment charges and other credit risk provisions for the nine months ended 30 September 2010 decreased by MYR39 million or 19.3 per cent against the corresponding period in 2009, largely reflecting improved corporate credit quality as a result of the robust economic conditions.

Total assets increased by MYR4.4 billion to MYR59.5 billion, up 8.0 per cent compared to 31 December 2009, mainly due to the increase in inter bank deposits and deposits from customers of MYR3.2 billion. Net loans, advances and financing as at 30 September 2010 stood at MYR32.4 billion, MYR3.8 billion higher than the MYR28.6 billion recorded as at 31 December 2009, mostly due to higher trade financing and mortgages.

The bank remains strongly capitalised and highly liquid.

Media enquiries to Elizabeth Wee on +603 2075 3351 or at elizabethwee@hsbc.com.my

HSBC Bank Malaysia Berhad
HSBC Bank Malaysia Berhad is a wholly-owned subsidiary of the HSBC Group. HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 8,000 offices in 87 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With assets of US$2,418 billion at 30 June 2010, HSBC is one of the world's largest banking and financial services organisations. HSBC is marketed worldwide as 'the world's local bank'.

Read the full release.

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