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04 Aug 2014

HSBC Bank Canada Second Quarter 2014 Results

  • Profit before income tax expense for the quarter ended 30 June 2014 was C$242m, an increase of 33.0% compared with the same period in 2013. Profit before income tax expense was C$475m for the half year ended 30 June 2014, an increase of 5.3% compared with the same period in 2013.
  • Profit attributable to the common shareholder was C$172m for the quarter ended 30 June 2014, an increase of 52.2% compared with the same period in 2013. Profit attributable to the common shareholder was C$332m for the half year ended 30 June 2014, an increase of 16.9% compared with the same period in 2013.
  • Return on average common equity was 15.6% for the quarter ended 30 June 2014 and 15.3% for the half year ended 30 June 2014 compared with 10.6% and 13.4% respectively for the same periods in 2013.
  • The cost efficiency ratio was 51.1% for the quarter ended 30 June 2014 and 51.6% for the half year ended 30 June 2014 compared with 50.1% and 47.4% respectively for the same periods in 2013.
  • Total assets were C$83.1bn at 30 June 2014 compared with C$84.3bn at 31 December 2013.
  • Common equity tier 1 capital ratio was 11.0%, tier 1 ratio 12.4% and total capital ratio 14.0% at 30 June 2014 compared with 10.8%, 13.6% and 15.5% respectively at 30 June 2013.

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

Overview
HSBC Bank Canada reported a profit before income tax expense of C$242m for the second quarter of 2014, an increase of C$60m, or 33%, compared with the second quarter of 2013 and an increase of C$9m or 4%, compared with the first quarter of 2014. Profit before income tax expense for the first half of 2014 was C$475m, an increase of C$24m, or 5%, compared with the first half of 2013.

The increase in profit before income tax expense compared with the same periods last year was primarily due to increased fees from credit and wealth products, lower loan impairment charges as a result of lower specific allowances for commercial customers and an increase in other income arising from a reduction in the fair value of investment property held for sale recorded in the second quarter of 2013. This was partially offset by lower net interest income from the continued planned run-off of the consumer finance portfolio, lower net trading income from foreign exchange and increased operating expenses as we invest in HSBC’s global standards, risk and compliance activities.

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

“The changes we have been making over the last several years have begun to show in our financial results. There is good momentum in all our business lines with increased commercial lending, residential mortgages and customer activity in Global Banking and Markets, and significant growth in funds under management. However, spread compression and the accelerated planned run-off of the consumer finance portfolio have both negatively impacted revenue. Consistent with the HSBC Group’s global strategy, we continue to make strides to grow our business and make it more efficient while implementing global standards within Canada.”

Read the HSBC Bank Canada Second Quarter 2014 Results media release

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