HSBC Bank Canada reports second quarter 2017 financial results
- Profit before income tax expense for the quarter ended 30 June 2017 was $228m, an increase of 35.7% compared with the same period in 2016.
- Profit attributable to the common shareholder was $158m for the quarter ended 30 June 2017, an increase of 42.3% compared with the same period in 2016.
- Return on average common equity was 13.3% for the quarter ended 30 June 2017 compared with 9.8% for the same period in 2016.
- The cost efficiency ratio was 64.1% for the quarter ended 30 June 2017 compared with 57.3% for the same period in 2016.
- In its annual Awards for Excellence, Euromoney magazine named HSBC the ‘World's Best Bank’. HSBC was also named the top bank in several other categories including ‘Best Transaction Bank in North America.’
- Total assets were $95.8bn at 30 June 2017 compared with $94.7bn at 31 December 2016.
- Common equity tier 1 capital ratio was 10.5%, tier 1 ratio 12.4% and total capital ratio 14.7% at 30 June 2017.
The abbreviations‘$m’ and ‘$bn’ represent millions and billions of Canadian dollars, respectively.
HSBC Bank Canada reported a profit before income tax expense of $228m for the second quarter of 2017, an increase of $60m, or 36% compared with the second quarter of 2016. The increase in profit before income tax is primarily due to recoveries of loan impairment charges from improved credit conditions mainly in the oil and gas industry compared to high impairment charges in the second quarter last year. This was partially offset by a decrease in trading revenues as a result of favorable fixed income trading activities in the prior year. Operating expenses were higher from the bank's continued investment in regulatory compliance, financial crime risk, and strategic spending to reduce future costs; as well as investments to support the growth of our businesses.
Commercial banking remains focused on enhancing and simplifying its delivery model, improving productivity for the benefit of its customers and employees. Our strategic plan is focused on growing market share through expansion in Eastern Canada, increasing productivity by deepening product penetration, streamlining processes and leveraging our differentiated product suite in Global Trade and Receivable Finance (GTRF) and Global Liquidity and Cash Management (GLCM), and building on our position as the leading international bank with improved positioning in US-Canada corridor. Global Banking and Markets generated higher event fee revenues through increased advisory and debt underwriting activities on a year to date basis by leveraging HSBC’s global network on behalf of its clients.
Retail Banking and Wealth Management had 4% growth in total relationship balances, with increased sales across our products consistent with our focus on growing and serving our customer base. We continue to invest in strategic initiatives to make our bank simpler, faster and better for our customers. Commenting on the results, Sandra Stuart, President and Chief Executive Officer of HSBC Bank Canada, said:
“Our strong performance in the first half was the result of continuing improvement in our oil and gas portfolio. In the second quarter, we recorded net new money sales in Retail Banking and Wealth Management and an increase in new-to-bank clients in Commercial Banking. There has been significant growth in revenues related to our international capabilities as our clients increasingly rely on HSBC’s international network to support their work with Canada’s key trading partners. This is consistent with Euromoney naming HSBC the top bank for transaction banking in North America, and the World’s Best Bank.”
“In this period, we also launched a number of options to enhance the digital experience including ApplePay, mobile cheque deposit and an upgraded online investing platform for our retail customers, as well as a new foreign exchange platform for customers of our Global Banking and Markets business and Commercial Bank. We also continued to hire and expand our team across the country to support the growth of each of our lines of business. As we move into the second half of the year, we do so with great momentum and pride in what we have been able to deliver for our customers.”
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