HSBC Bank Canada first quarter 2015 results
- Profit before income tax expense was C$231m for the quarter ended 31 March 2015, in line with the same period in 2014.
- Profit attributable to the common shareholder was C$163m for the quarter ended 31 March 2015, an increase of 1.9% compared with the same period in 2014.
- Return on average common equity was 14.5% for the quarter ended 31 March 2015 compared with 15.0% for the same period in 2014.
- The cost efficiency ratio was 54.0% for the quarter ended 31 March 2015 compared with 51.9% for the same period in 2014.
- Total assets were C$91.0bn at 31 March 2015 compared with C$88.2bn at 31 December 2014.
- Common equity tier 1 capital ratio was 10.5%, the tier 1 ratio was 11.8% and the total capital ratio was 13.1% at 31 March 2015.
The abbreviations ‘C$m’ and ‘C$bn’ represent millions and billions of Canadian dollars, respectively.
HSBC Bank Canada reported profit before income tax expense of C$231m for the first quarter of 2015, a decrease of C$2m, or 0.9%, compared with the first quarter of 2014, but an increase of C$25m, or 12.1%, compared with the fourth quarter of 2014.
The impact of higher fee income arising from increased capital market activities, growth in our Commercial and Global Banking and Market portfolios and increased gains on sales of available-for-sale securities was more than offset by the impact of derivative fair value movements recycled to the income statement due to hedge accounting criteria not having been met. Results also continue to be negatively impacted by competitive pressures in the low interest rate environment and run-off of the consumer finance portfolio.
The increase in profit before income tax expense compared with the fourth quarter of 2014, in addition to the factors noted above, also benefitted from lower specific loan impairment charges.
Commercial Banking continues to make progress in growing our business and streamlining processes. Lending balances grew by over C$1bn in the first quarter of 2015 and the number of new-to-bank lending customers increased by 17% since the first quarter of 2014. Significant improvements were seen in the credit application and client on-boarding processes.
Global Banking and Markets continued to see an increase in lending and credit activities and the Capital Financing business had increased activity in Capital Markets and Leverage and Acquisition Finance during the quarter.
Retail Banking and Wealth Management continues to benefit from the growth in residential mortgages and wealth balances, although revenues continue to be impacted by the highly competitive low interest rate environment.
Commenting on the results, Paulo Maia, President and Chief Executive Officer of HSBC Bank Canada, said:
“I am happy to report growth in both fees and business volumes across all three business lines. There have been increases in Global Banking and Commercial lending, residential mortgages, wealth balances and capital markets activity in the quarter, and there is good momentum carrying us into the second quarter. The business continues to face challenges from the low interest rate environment and a delicate balance needs to be kept between investing in our business and managing costs. However, I am pleased with the growth we have achieved by providing the expertise and tools our clients need to do business internationally and helping internationally minded individuals to manage their finances.”
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