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12 Dec 2011

HSBC Bank Malaysia Berhad results for the financial period ended 30 September 2011 - highlights

  • Profit before tax for the nine months ended 30 September 2011 was MYR1,019m, MYR217m or 27.1% higher than reported for the same period in 2010.
  • Operating income grew to MYR2,090m, an increase of MYR278m or 15.3% compared with the same period in 2010. This was mainly due to higher trading profits of MYR542m, an increase of MYR126m or 30.4% and higher income from Islamic banking operations of MYR312m, an increase of MYR80m or 34.4%.
  • Loan impairment charges and other credit risk provisions at MYR166m increased slightly by MYR1m or 0.5% for the nine months ended 30 September 2011 compared to the same period last year.
  • The cost efficiency ratio for the nine months ended 30 September 2011 improved to 43.1% from 46.6% for the same period in 2010.
  • Total assets of MYR72.7bn at 30 September 2011 increased from MYR63.8bn at 31 December 2010 (30 September 2010: MYR59.5bn).
  • The core capital ratio and risk-weighted capital ratio (net of proposed/paid dividends) remain strong at 8.7% and 12.4% respectively at 30 September 2011. This was slightly lower compared with 9.6% and 13.7% respectively at 31 December 2010 (30 September 2010: 9.8% and 14.2% respectively) as risk weighted assets increased 17.5% to MYR44.9bn (31 December 2010: MYR38.2bn; 30 September 2010: MYR36.2bn) broadly in line with the growth in the balance sheet.

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 ('the Bank') and Global CEO, HSBC Amanah, commented: "For the first time in history, the Bank has crossed the one billion mark in profit before tax by the third quarter of the year, as profits grew by MYR217m or 27.1% to MYR1,019m.

"Our performance reflects positive economic momentum in 2011 in Malaysia with customers actively pursuing opportunities outlined in the Malaysian government's Economic Transformation Programme and across borders in Asia. HSBC Malaysia remains active in supporting its core customers as they continue to grow.

"HSBC in Malaysia is poised to expand its network to meet growing local demand. In line with the positive economic growth of the country, we will continue to invest and positively contribute towards the economic and financial development of Malaysia."

Financial Commentary
HSBC Bank Malaysia Berhad reported profit before tax of MYR1,019m in the first nine months of 2011 (MYR802m for the same period in 2010), an increase of 27.1% or MYR217m compared with the same period last year.

Operating income grew to MYR2,090m, an increase of MYR278m or 15.3% compared with the same period in 2010. This was from higher trading profits of MYR542m, up MYR126m or 30.4%; higher income from Islamic banking operations of MYR312m, up MYR80m or 34.4%; higher net interest income of MYR861m, up MYR47m or 5.8% and higher net fee income of MYR356m, up MYR35m or 11.1%.

Trading profits advanced on greater foreign currency gains and gains on financial assets held-for-trading and other financial instruments, but were partly offset by lower gains from trading in derivatives. Meanwhile, income from Islamic banking operations showed strong growth as Islamic financing continues to gain momentum in the local and international financial industry. Net interest income rose on account of the rising interest rate environment and larger gross loans, advances and financing base while net fee income improved on higher insurance fees and commission on sales of unit trusts.

Other operating expenses for the nine months ended 30 September 2011 increased by 6.5% or MYR55m to MYR900m compared with MYR846m for the same period in 2010, mainly due to higher general administrative expenses (up MYR28m or 11.1%) and personnel expenses (up MYR17m or 4.1%). General administrative expenses were higher mainly on increased recharges for Group IT services, while higher personnel expenses were in line with the increase in headcount due to expansion of the business.

Loan impairment charges and other credit risk provisions showed only a slight increase of MYR1m or 0.5% for the nine months ended 30 September 2011 compared to the same period last year. The increase was mainly on higher collective impairment provisions (up MYR22m) due to the expansion in the gross loans, advances and financing base, moderated by lower individual impairment provisions (down MYR20m) due to improvements in loan quality and higher recoveries.

Total assets increased by MYR8.9bn or 14.0% to MYR72.7bn compared with 31 December 2010, in tandem with the increase in deposits from customers of MYR6.6bn or 13.8% (30 September 2011: MYR55.0bn; 31 December 2010: MYR48.3bn) and inter-bank deposits of MYR1.1bn or 15.4% (30 September 2011: MYR7.9bn; 31 December 2010: MYR6.9bn). Gross loans, advances and financing at 30 September 2011 stood at MYR39.0bn, MYR4.9bn or 14.5% higher than the MYR34.0bn recorded at 31 December 2010 while the gross impaired loans ratio improved against history at 1.8% (31 December 2010: 2.0%, 30 September 2010: 2.0%).

Media enquiries to Marlene Kaur at +603 2075 3351 or marlenekaur@hsbc.com.my

Notes to editors:

HSBC in Malaysia
HSBC Bank Malaysia Berhad was locally incorporated in 1984 and is a wholly-owned subsidiary of The Hongkong and Shanghai Banking Corporation Limited (a company under the HSBC Group). In 2006, HSBC was the first foreign bank to be awarded a Takaful (Islamic insurance) license in Malaysia. HSBC Amanah Takaful (Malaysia) Sdn Bhd, a joint venture between HSBC Insurance (Asia Pacific) Holdings Limited (49% shareholding), Jerneh Asia Berhad (31% shareholding) and Employees Provident Fund Board of Malaysia (20% shareholding), commenced operations in August 2006. In 2007, HSBC Bank Malaysia Berhad was the first locally incorporated foreign bank to be awarded an Islamic banking subsidiary licence in Malaysia, and HSBC Amanah Malaysia, a full fledged Islamic bank wholly owned by HSBC Bank Malaysia, commenced operations in August 2008. HSBC in Malaysia has a network of 55 branches nationwide, of which 13 are Islamic finance branches.

The Hongkong and Shanghai Banking Corporation Limited
The Hongkong and Shanghai Banking Corporation Limited is the founding and a principal member of the HSBC Group which serves customers worldwide in over 80 countries and territories in Europe, the Asia-Pacific region, North and Latin America, the Middle East and Africa. With assets of US$2,716bn at 30 September 2011, HSBC is one of the world's largest banking and financial services organisations.

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