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27 Jul 2012

HSBC Bank Canada second quarter and first half 2012 results

 

  • Profit attributable to common shareholders was C$186m for the quarter ended 30 June 2012, a decrease of 3% over the same period in 2011.
  • Profit attributable to common shareholders was C$388m for the half-year ended 30 June 2012, an increase of 17% over the same period in 2011.
  • Return on average common equity was 18.4% for the quarter ended 30 June 2012 and 19.1% for the half-year ended 30 June 2012 compared with 21.3% and 19.0% respectively for the same periods in 2011.
  • The cost efficiency ratio stayed strong at 45.0% for the quarter ended 30 June 2012 and 47.7% for the half-year ended 30 June 2012 compared with 49.1% and 52.4% respectively for the same periods in 2011.
  • Total assets were C$82.1bn at 30 June 2012 compared with C$81.5bn at 30 June 2011.
  • Total assets under administration decreased to C$18.3bn at 30 June 2012 from C$32.3bn at 30 June 2011 primarily due to the sale of the bank's full service retail brokerage business. Excluding the impact of this sale, total assets under administration increased by C$1.0bn from 30 June 2011.
  • Tier 1 capital ratio of 13.8% and a total capital ratio of 16.1% at 30 June 2012 compared to 13.3% and 16.0% respectively at 30 June 2011, and 13.4% and 16.0% respectively at 31 December 2011.

The abbreviations "C$m" and "C$bn" represent millions and billions of Canadian dollars, respectively.

Overview

HSBC Bank Canada recorded profit of C$203m for the second quarter of 2012, a decrease of C$5m, or 2% compared to C$208m for the second quarter of 2011, and a decrease of C$17m, or 8%, compared to the first quarter of 2012. Profit for the first half of 2012 was C$423m, an increase of C$55m, or 15% compared to the first half of 2011. Profit attributable to common shareholders was C$186m for the second quarter of 2012, a decrease of C$5m, or 3% compared with C$191m for the second quarter of 2011, and a decrease of C$16m, or 8% compared with the first quarter of 2012. Profit attributable to common shareholders for the first half of 2012 was C$388m, an increase of C$55m, or 17%, compared with the first half of 2011.

The second quarter of 2011 included a C$47m recovery of fees paid in prior years from an HSBC affiliate. The first quarter of 2012 included a gain of C$84m related to the sale of the full service retail brokerage business offset by restructuring charges of C$36m mostly relating to the wind-down of the consumer finance business. Excluding these items adjusted for income tax, profit for the second quarter of 2012 increased by C$42m, or 26%, compared to second quarter of 2011, and increased by C$30m, or 17% compared to the first quarter of 2012.  In addition, excluding these items adjusted for income tax, profit for the first half of 2012 was C$376m, an increase of C$55m, or 17%, compared to the first half of 2011. This was due to a decrease in total operating expenses related to the wind-down of the bank's consumer finance business, gains on the sale of financial investments and an increase in net trading income relating to customer foreign exchange trading.

Commenting on the results, Lindsay Gordon, President and Chief Executive Officer of HSBC Bank Canada, said:

"The bank's results continued to show resilience and good progress against our strategic objectives. We are focused on growing HSBC Bank Canada to best serve our customers – investing in our core businesses of Commercial Banking, Global Banking and Markets, and Retail Banking and Wealth Management, improving efficiency, and driving down costs – by providing internationally connected products which meet their needs."

Read the full release.

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