VANCOUVER, Aug. 3, 2015
/CNW/ -
- Profit before income tax expense for the quarter ended
30 June 2015 was C$227m, a decrease of 6.2% compared with the same
period in 2014. Profit before income tax expense was C$458m for the half year ended 30 June 2015, a decrease of 3.6% compared with
the same period in 2014.
- Profit attributable to the common shareholder was C$161m for the quarter ended 30 June 2015, a decrease of 6.4% compared with
the same period in 2014. Profit attributable to the common
shareholder was C$324m for the half
year ended 30 June 2015, a decrease
of 2.4% compared with the same period in 2014.
- Return on average common equity was 14.0% for the quarter ended
30 June 2015 and 14.3% for the half
year ended 30 June 2015 compared with
15.6% and 15.3% respectively for the same periods in 2014.
- The cost efficiency ratio was 53.8% and 53.9% respectively for
the quarter and half year ended 30 June
2015 compared with 51.1% and 51.6% for the same periods in
2014.
- Total assets were C$89.4bn at
30 June 2015 compared with
C$88.2bn at 31
December 2014.
- Common equity tier 1 capital ratio was 10.5%, tier 1 ratio
12.5% and total capital ratio 13.8% at 30
June 2015 compared with 10.6%, 12.0% and 13.5% respectively
at 31 December 2014.
The abbreviations 'C$m' and 'C$bn' represent millions and
billions of Canadian dollars, respectively.
HSBC Bank Canada
Financial Commentary
Overview
HSBC Bank Canada reported a profit before income tax expense of
C$227m for the second quarter of
2015, a decrease of C$15m, or 6.2%,
compared with the second quarter of 2014 and a decrease of
C$4m or 1.7% compared with the first
quarter of 2015. Profit before income tax expense for the first
half of 2015 was C$458m, a decrease
of C$17m, or 3.6% compared with the
first half of 2014. Compared to the second quarter of 2014, profit
before tax was lower, mainly as a result of margin compression,
lower gains on financial investments and higher costs, partially
offset by increased credit facility and corporate finance fees. For
the half year ended 30 June 2015, in
addition to the factors note above, profit before tax was lower due
to lower trading income from derivative fair value movements that
were recycled to the income statement as a result of hedge
accounting criteria not having been met. This was offset by
increased fee income from wealth product sales and lower loan
impairment charges, mainly from the planned consumer finance
portfolio run-off.
Commercial Banking continues to make progress in growing our
business and streamlining processes. We continued to see strong
increases in new-to-bank customers but this was tempered by a low
utilisation rate of recently authorised credit facilities.
Initiatives to streamline credit application and client on-boarding
processes helped to improve relationship manager productivity
allowing further business development activities.
By more fully leveraging our global network on behalf of our
clients, Global Banking and Markets saw increases in advisory and
capital markets fees as well as lending and credit activities while
the Capital Financing business had increased activity in closing
significant deals during the quarter.
During the quarter, Retail Banking and Wealth Management
continued to benefit from growth in residential mortgages, deposits
and wealth balances, with a key focus on revenue in a highly
competitive low interest rate environment.
Commenting on the results, Sandra
Stuart, President and Chief Executive Officer of HSBC Bank
Canada, said: "We are focused on growing our business in
Canada, however, we do expect
current challenges to continue including pressure on the oil sector
and related industries and prevailing low interest rates. There was
growth in all three business lines, with Global Banking and Markets
making a particularly strong showing. Clearly customers see value
in the unique expertise we bring to doing business internationally
and helping internationally minded individuals to manage their
finances. We are continuing to invest in making our operations more
efficient, implementing HSBC's Global Standards and developing new
products and services - all to ensure a better experience for our
clients across all business lines."
Analysis of Consolidated Financial Results for the Second
Quarter of 2015
Net interest income for the second quarter of 2015
was C$289m, a decrease of
C$18m, or 5.9%, compared with the
second quarter of 2014, and a marginal increase compared with the
first quarter of 2015. Net interest income for the first half of
2015 was C$576m, a decrease of
C$38m, or 6.2%, compared with the
first half of 2014. The decrease over comparative periods in 2014
was primarily due to the competitive low interest rate environment
including the impact of the Bank of Canada rate cut and the impact of the
continuing planned run-off of the higher yielding consumer finance
portfolio. This was partially offset by increases associated with
the growth in commercial loans and residential mortgages. The
increase over the first quarter of 2015 was primarily due to one
additional day in the quarter as well as growth in commercial
loans, partially offset by reductions in yields on financial
investments.
Net fee income for the second quarter of 2015 was
C$181m, an increase of C$21m, or 13.1%, compared with the second quarter
of 2014 and an increase of C$9m, or
5.2%, compared with the first quarter of 2015. Net fee income for
the first half of 2015 was C$353m, an
increase of C$38m, or 12.1%, compared
with the first half of 2014. Net fee income from the same periods
last year and the first quarter of 2015 was higher primarily due to
increased fees from advisory, debt capital market and leveraged and
acquisition finance activities and higher fees from credit products
such as standby lines of credit and banker's acceptances as well as
continued growth in wealth management.
Net trading income for the second quarter of 2015
was C$41m, an increase of
C$8m, or 24.2% compared with the
second quarter of 2014, and an increase of C$26m, or 173.3%, compared with the first quarter
of 2015. Net trading income for the first half of 2015 was
C$56m, a decrease of C$16m, or 22.2%, compared with the first half of
2014. Net trading income increased compared with the second quarter
of 2014 mainly due to debit valuation adjustments on derivative
contracts arising from the narrowing of our own credit spreads and
hedge ineffectiveness recorded in the second quarter of 2014. In
the first quarter of 2015, derivative fair value movements were
recycled to the income statement due to hedge accounting criteria
not having been met, negatively impacting net trading income. This
impact on net trading income, which was not repeated in the second
quarter of 2015, also negatively affected the first half of 2015
compared to the first half of 2014.
Net income from financial instruments designated at fair
value was C$nil for the second quarter of 2015 compared to
an expense of C$1m in the second
quarter of 2014 and income of C$2m in
the first quarter of 2015. The bank has previously designated
certain of its own subordinated debentures to be recorded at fair
value. The net income from financial instruments designated at fair
value results from marginal widening of the bank's own credit
spread in the first quarter of 2015 which decreased the fair value
of these subordinated debentures. This compared with an expense
recorded in comparative periods in 2014 which arose from the
narrowing of the bank's own credit spread.
Gains less losses from financial investments for
the second quarter of 2015 were C$18m, a decrease of C$9m, or 33.3%, compared with the second quarter
of 2014 and a decrease of C$18m, or
50.0%, compared with the first quarter of 2015. Gains less losses
from financial investments for the first half of 2015 was
C$54m, an increase of C$8m, or 17.4%, compared with the first half of
2014. The bank realises gains and losses from financial investments
from disposals of available-for-sale financial investments driven
by balance sheet management activities. The variances from
comparative periods are primarily as a result of the bank's
continuous balance sheet management activities. In the first
quarter of 2015 we benefitted from higher gains on disposals of
financial investments arising from re-balancing of the bank's
portfolio. In addition, in the second quarter of 2014 C$16m was recorded on the disposal of certain
available-for-sale securities in our Commercial Banking business
that was not repeated in 2015.
Other operating income for the second quarter of
2015 was C$12m, marginally lower than
the second quarter of 2014, and C$6m
lower than the first quarter of 2015 which included income from the
sale of a small impaired loan portfolio. Other operating
income for the first half of 2015 was C$30m, an increase of C$3m, or 11.1%, compared with the first half of
2014, primarily due to the sale of impaired loans
Loan impairment charges and other credit risk
provisions for the second quarter of 2015 were C$23m, C$4m or
14.8% less than the second quarter of 2014 and C$7m, or 43.8%, more than the first quarter of
2015. Loan impairment charges and other credit risk provisions for
the first half of 2015 were C$39m,
C$14m or 26.4%, less than the first
half of 2014. Specific allowances for commercial customers and
impairment charges related to the continuing planned run-off of the
consumer finance portfolio decreased compared to the same periods
in 2014. As a result of deteriorating credit metrics in the
energy sector, loan impairment charges are higher than in the first
quarter of 2015.
Total operating expenses for the second quarter of
2015 were C$291m, an increase of
C$15m, or 5.4% and C$5m, or 1.7%, compared with the second quarter
of 2014 and the first quarter of 2015 respectively. Total operating
expenses for the first half of 2015 was C$577m, C$25m, or
4.5% higher than the first half of 2014. HSBC has continued to
invest in Global Standards implementation and other risk and
compliance activities and also incurred increased costs related to
efficiency initiatives. General and administrative expenses are
higher than in the first quarter of 2015 mainly due to the timing
of certain donation, marketing and training expenditures.
Share of profit in associates represents changes
in the values of bank's investment in certain private equity funds,
which for the second quarter of 2015 was C$nil, compared to
C$6m in the second quarter of 2014,
and C$3m in the first quarter of
2015.
Income tax expense. The effective tax rate in the
second quarter of 2015 was 26.2%, compared with 25.0% in the second
quarter of 2014 and 26.8% in the first quarter of 2015. Income tax
expense for the comparative quarter of 2014 includes the effect of
an income tax refund.
Movement in Financial Position
Total assets at 30 June 2015 were
C$89.4bn, an increase of C$1.2bn from 31 December
2014. Increases in commercial customer lending and
residential mortgages resulted in a C$1.6bn growth in loans and advances to
customers. An increase in financial investments of C$0.8bn was offset by small declines including
those in trading assets and derivatives.
Total liabilities at 30 June 2015
were C$83.9bn, an increase of
C$0.7bn from 31 December 2014. There were increases in
non-trading repurchase agreements of C$0.7bn resulting from balance sheet management
activities and trading liabilities of C$0.7bn, primarily due to higher balances from
pending trade settlements and short position securities. However
these were partially offset by small declines in derivatives.
Total equity at 30 June 2015 was
C$5.5bn, an increase of C$0.5bn from 31 December
2014. The increase was due to an issue of C$0.5bn in preferred shares to an HSBC Group
company, profits generated in the period and an increase in other
reserves of C$0.2bn offset by a
reduction in non-controlling interests resulting from the
redemption of C$0.2bn in HSBC Canada
Asset Trust Securities.
Business Performance in the Second Quarter of 2015
Commercial Banking
Profit before income tax expense was C$118m for the second quarter of 2015, a decrease
of C$38m, or 24%, compared with the
second quarter of 2014 and a decrease of C$18m or 13%, compared with the first quarter of
2015. Profit before income tax expense for the first half of 2015
was C$254m, a decrease of
C$51m, or 17%, compared with the
first half of 2014.
The decrease in profit before income tax expense compared with
the same periods last year was primarily driven by margin
compression in a competitive low interest rate environment,
including the impact of the Bank of Canada rate cut, portfolio repositioning and
gains on sales of asset-for-sales securities in 2014 that was not
repeated in 2015. Increased loan impairment charges, driven by
deteriorating credit metrics in the energy sector and increased
software and global delivery costs also contributed to the decrease
in profit before income tax expense compared with the first quarter
in 2015.
Global Banking and Markets
Profit before income tax expense was C$94m for the second quarter of 2015, an increase
of C$30m, or 47%, compared with the
second quarter of 2014 and an increase of C$13m or 16% compared with the first quarter of
2015. Profit before income tax expense was C$175m for the first half of 2015, an increase of
C$34m, or 24% compared with the first
half of 2014. The increase in profit before income tax expense
compared with the same periods in 2014 was mainly due to increased
advisory and capital markets fees, gains on disposals from
re-balancing of the financial investments portfolio and increased
trading income resulting from debit valuation adjustments on
derivatives resulting from narrowing of our own credit spreads
recorded in 2014. The increase in profit over the first quarter of
2015 arose from increased fees as well as the impact in the first
quarter of 2015 of derivative fair value movements recycled to the
income statement due to hedge accounting criteria not having been
met, partially offset by lower realised gains from financial
investments arising from balance sheet management activities.
Retail Banking and Wealth Management
Profit before income tax expense was C$18m for the second quarter of 2015, a decrease
of C$6m, or 25%, compared with the
second quarter of 2014 and a decrease of C$5m, or 22%, compared with the first quarter of
2015. Profit before income tax expense was C$41m for the first half of 2015, an increase of
C$2m, or 5% compared with the first
half of 2014.
Profit before income tax expense relating to ongoing business
(excluding the continuing planned run-off of the consumer finance
portfolio) was C$9m, a decrease of
C$6m, or 40%, compared with the
second quarter of 2014 and a decrease of C$2m, or 18%, compared with the first quarter of
2015. Profit before income tax expense relating to ongoing business
was C$20m for the first half of 2015,
a decrease of C$4m, or 17%, compared
with the first half of 2014. The decreases over comparative periods
were primarily due to increased business operating expenses and
investment in HSBC's Global Standards and risk and compliance
activities.
Profit before income tax expense relating to the run-off
consumer finance portfolio for the second quarter of 2015 was
C$9m, unchanged from the second
quarter of 2014 and a decrease of C$3m or 25% from the first quarter of 2015.
Profit before income tax expense for this business was C$21m for the first half of 2015, an increase of
C$6m, or 40% compared with the first
half of 2014. The increase compared to the same periods in 2014 was
primarily due to lower loan impairment charges and lower operating
expenses from the continuing planned run-off of the portfolio
partially offset by lower interest income from declining loan
balances. In addition, the results for the first quarter of 2015
benefitted from income on the sale of a small impaired loan
portfolio.
Other
Transactions which do not directly relate to our global lines of
business are reported in 'Other'. The main items reported under
'Other' include income and expense from the impact of changes in
credit spreads on our own subordinated debentures designated at
fair value; and information technology services provided to HSBC
Group companies on an arm's length basis. Loss before income tax
expense was C$3m for the quarter
ended 30 June 2015, little changed
from the second quarter of 2014, but reduced compared to first
quarter of 2015. That quarter reflected foreign exchange losses on
settlements of US dollar denominated services provided by HSBC
Group companies as well as the timing of recoveries from other
Group companies. This also impacted the increase in operating
expenses for the first half of 2015 compared to the same period in
2014.
Preferred Shares
The bank issued to its parent on 30 June
2015, C$500m Class 1 Preferred
Shares Series G. Each share yields 4%, payable quarterly, as and
when declared and are non-cumulative. Subject to
regulatory approval, HBCA may on 30 June
2020 and every 5 years thereafter, redeem a portion or all
of the Series G shares at par value in cash. The shares
include non-viability contingency capital provisions, necessary for
the shares to qualify as tier 1 regulatory capital under Basel
III.
Non-Controlling Interests
HSBC Canada Asset Trust Securities Series 2015 were redeemed at
the issue price on 30 June 2015 for a
total cost of C$200m.
Dividends
During the second quarter of 2015, the bank declared and paid
C$88m in dividends on HSBC Bank
Canada common shares, an increase of C$8m from the same quarter in 2014.
Regular quarterly dividends of 31.875
cents per share have been declared on HSBC Bank Canada Class
1 Preferred Shares – Series C and 31.25
cents per share on Class 1 Preferred Shares – Series D.
Dividends will be paid on 30 September
2015, for shareholders of record on 15 September
2015.
Use of non-IFRS financial measures
In measuring our performance, the financial measures that we use
include those which have been derived from our reported results.
However, these are not presented within the Financial Statements
and are not defined under IFRS. These are considered non-IFRS
financial measures and are unlikely to be comparable to similar
measures presented by other companies. The following non-IFRS
financial measures are used throughout this document and their
purposes and definitions are discussed below:
Financial position at period end
These measures are indicators of the stability of the bank's
balance sheet and the degree funds are deployed to fund assets.
Ratio of customer advances to customer accounts is
calculated by dividing loans and advances to customers by customer
accounts using period-end balances.
Average total shareholders' equity to average total
assets is calculated by dividing average total shareholders'
equity with average total assets (determined using month-end
balances during the period).
Credit coverage ratios
Credit coverage ratios are useful to management as a measure of the
extent of incurred loan impairment charges relative to the bank's
performance and size of its customer loan portfolio during the
period.
Loan impairment charges to total operating income is
calculated as loan impairment charges and other credit provisions,
as a percentage of total operating income for the period.
Loan impairment charges to average gross customer
advances is calculated as annualised loan impairment charges
and other credit provisions for the period, as a percentage of
average gross customer advances (determined using month-end
balances during the period).
Total impairment allowances to impaired loans at
period-end are useful to management to evaluate the coverage of
impairment allowances relative to impaired loans using period-end
balances.
Return ratios
Return ratios are useful for management to evaluate profitability
on equity, assets and risk-weighted assets.
Return on average common equity is calculated as
annualised profit attributable to the common shareholder for the
period, divided by average common equity (determined using
month-end balances during the period).
Post-tax return on average total assets is calculated as
annualised profit attributable to the common shareholder for the
period, divided by average assets (determined using average
month-end balances during the period).
Pre-tax return on average risk-weighted assets is
calculated as annualised profit attributable to the common
shareholder for the period, divided by average risk-weighted assets
(determined using quarter-end balances during the period).
Efficiency ratios
Efficiency ratios are measures of the bank's efficiency in managing
its operating expense to generate revenue.
Cost efficiency ratio is calculated as total operating
expenses for the period as a percentage of total operating income
for the period.
Adjusted cost efficiency ratio is calculated similar to
the cost efficiency ratio; however, total operating income for the
period excludes gains and losses from financial instruments
designated at fair value, as the movement in value of the bank's
own subordinated debt issues are primarily driven by changes in
market rates and are not under the control of management.
Revenue mix ratio
This measure demonstrates the contribution of each of the primary
revenue streams to total operating income.
Net interest income, net fee income and net trading income to
total operating income is calculated as net interest income,
net fee income and net trading income for the period divided by
total operating income for the period.
About HSBC Bank Canada
HSBC Bank Canada, a subsidiary of HSBC Holdings plc, is the
leading international bank in the country. We help companies
and individuals across Canada to
do business and manage their finances internationally through three
global business lines: Commercial Banking, Global Banking and
Markets, and Retail Banking and Wealth Management.
Canada is a priority market for
the HSBC Group – one of the world's largest banking and financial
services groups with assets of US$2,572bn at 30 June 2015. Linked by
advanced technology, HSBC serves customers worldwide through an
international network of around 6,100 offices in 72 countries and
territories in Europe,
Asia, North and Latin America, and the Middle East and North Africa.
Copies of HSBC Bank Canada's second quarter 2015 interim report
will be sent to shareholders in August
2015.
HSBC Bank
Canada
|
|
|
Summary
|
|
|
|
|
(Figures in C$m,
except where otherwise stated)
|
Quarter
ended
|
|
Half-year
ended
|
|
30
June 2015
|
|
30
June 2014
|
|
31
March 2015
|
|
30
June 2015
|
|
30
June 2014
|
Financial
performance for the period
|
|
|
|
|
|
|
|
|
|
|
Total operating
income
|
541
|
|
539
|
|
530
|
|
1,071
|
|
1,071
|
|
Profit before income
tax expense
|
227
|
|
242
|
|
231
|
|
458
|
|
475
|
|
Profit attributable
to the common shareholder
|
161
|
|
172
|
|
163
|
|
324
|
|
332
|
|
Basic earnings per
common share (C$)
|
0.32
|
|
0.35
|
|
0.33
|
|
0.65
|
|
0.67
|
|
|
|
|
|
|
|
|
|
|
Financial position
at period-end
|
|
|
|
|
|
|
|
|
|
|
Loan and advances to
customers
|
42,866
|
|
41,549
|
|
42,660
|
|
|
|
|
|
Customer
accounts
|
50,362
|
|
49,329
|
|
50,490
|
|
|
|
|
|
Ratio of customer
advances to customer accounts(%)1
|
85.1
|
|
84.2
|
|
84.5
|
|
|
|
|
|
Shareholders'
equity
|
5,483
|
|
4,791
|
|
4,959
|
|
|
|
|
|
Average total
shareholders' equity to average total
assets(%)1
|
5.6
|
|
5.8
|
|
5.4
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
Capital
measures2
|
|
|
|
|
|
|
|
|
|
|
Common equity tier 1
capital ratio (%)
|
10.5
|
|
11.0
|
|
10.5
|
|
|
|
|
|
Tier 1 ratio
(%)
|
12.5
|
|
12.4
|
|
11.8
|
|
|
|
|
|
Total capital ratio
(%)
|
13.8
|
|
14.0
|
|
13.1
|
|
|
|
|
|
Assets-to-capital
multiple-number of times3
|
n/a
|
|
16.0
|
|
n/a
|
|
|
|
|
|
Leverage ratio
(%)3
|
4.9
|
|
n/a
|
|
4.6
|
|
|
|
|
|
Risk-weighted
assets
|
42,358
|
|
38,629
|
|
41,659
|
|
|
|
|
|
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|
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|
|
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Performance ratios
(%)1
|
|
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Return ratios
(%)
|
|
|
|
|
|
|
|
|
|
Return on average
common shareholder's equity
|
14.0
|
|
15.6
|
|
14.5
|
|
14.3
|
|
15.3
|
Post-tax return on
average total assets
|
0.71
|
|
0.81
|
|
0.73
|
|
0.72
|
|
0.79
|
Pre-tax return on
average risk-weighted assets2
|
2.2
|
|
2.5
|
|
2.3
|
|
2.2
|
|
2.5
|
|
|
|
|
|
|
|
|
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Credit coverage
ratios (%)
|
|
|
|
|
|
|
|
|
|
Loan impairment
charges to total operating income
|
4.3
|
|
5.0
|
|
3.0
|
|
3.6
|
|
4.9
|
Loan impairment
charges to average gross customer advances and
acceptances
|
0.2
|
|
0.3
|
|
0.2
|
|
0.2
|
|
0.4
|
Total impairment
allowances to impaired loans and acceptances at
period-end
|
81.1
|
|
67.7
|
|
74.8
|
|
81.1
|
|
67.7
|
|
|
|
|
|
|
|
|
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|
Efficiency and
revenue mix ratios (%)
|
|
|
|
|
|
|
|
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Cost efficiency
ratio
|
53.8
|
|
51.1
|
|
54.0
|
|
53.9
|
|
51.6
|
Adjusted cost
efficiency ratio
|
53.8
|
|
51.0
|
|
54.2
|
|
54.0
|
|
51.4
|
As a percentage of
total operating income:
|
|
|
|
|
|
|
|
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– net interest
income
|
53.4
|
|
57.0
|
|
54.2
|
|
53.8
|
|
57.3
|
|
– net fee
income
|
33.5
|
|
29.7
|
|
32.5
|
|
32.9
|
|
29.4
|
|
– net trading
income
|
7.6
|
|
6.2
|
|
2.8
|
|
5.2
|
|
6.8
|
1
|
Refer to the 'Use
of non-IFRS financial measures' section of this document for a
discussion of non-IFRS financial measures.
|
2
|
The bank assesses
capital adequacy against standards established in guidelines issued
by OSFI in accordance with the Basel III capital adequacy
frameworks.
|
3
|
Leverage ratio
replaced assets-to-capital multiple effective 1 January
2015.
|
HSBC Bank
Canada
|
|
Consolidated
Income Statement (Unaudited)
|
|
|
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|
Figures in
C$m
|
|
Quarter
ended
|
|
Half-year
ended
|
(except per share
amounts)
|
|
30
June 2015
|
|
30
June 2014
|
|
31 March
2015
|
|
30
June 2015
|
|
30
June 2014
|
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
$m
|
|
|
|
|
|
|
|
|
|
|
|
Interest
income
|
|
427
|
|
484
|
|
434
|
|
861
|
|
967
|
Interest
expense
|
|
(138)
|
|
(177)
|
|
(147)
|
|
(285)
|
|
(353)
|
Net interest
income
|
|
289
|
|
307
|
|
287
|
|
576
|
|
614
|
|
|
|
|
|
|
|
|
|
|
|
Fee income
|
|
198
|
|
183
|
|
191
|
|
389
|
|
355
|
Fee
expense
|
|
(17)
|
|
(23)
|
|
(19)
|
|
(36)
|
|
(40)
|
Net fee
income
|
|
181
|
|
160
|
|
172
|
|
353
|
|
315
|
|
|
|
|
|
|
|
|
|
|
|
Trading income
excluding net interest income
|
|
33
|
|
32
|
|
8
|
|
41
|
|
68
|
Net interest income
on trading activities
|
|
8
|
|
1
|
|
7
|
|
15
|
|
4
|
Net trading
income
|
|
41
|
|
33
|
|
15
|
|
56
|
|
72
|
|
|
|
|
|
|
|
|
|
|
|
Net income/(expense)
from financial instruments designated at fair value
|
|
–
|
|
(1)
|
|
2
|
|
2
|
|
(3)
|
Gains less losses
from financial investments
|
|
18
|
|
27
|
|
36
|
|
54
|
|
46
|
Other operating
income
|
|
12
|
|
13
|
|
18
|
|
30
|
|
27
|
|
|
|
|
|
|
|
|
|
|
|
Total operating
income
|
|
541
|
|
539
|
|
530
|
|
1,071
|
|
1,071
|
Loan impairment
charges and other credit risk provisions
|
|
(23)
|
|
(27)
|
|
(16)
|
|
(39)
|
|
(53)
|
Net operating
income
|
|
518
|
|
512
|
|
514
|
|
1,032
|
|
1,018
|
|
|
|
|
|
|
|
|
|
|
|
Employee compensation
and benefits
|
|
(168)
|
|
(152)
|
|
(169)
|
|
(337)
|
|
(311)
|
General and
administrative expenses
|
|
(112)
|
|
(111)
|
|
(106)
|
|
(218)
|
|
(215)
|
Depreciation of
property, plant and equipment
|
|
(8)
|
|
(9)
|
|
(7)
|
|
(15)
|
|
(17)
|
Amortisation and
impairment of intangible assets
|
|
(3)
|
|
(4)
|
|
(4)
|
|
(7)
|
|
(9)
|
Total operating
expenses
|
|
(291)
|
|
(276)
|
|
(286)
|
|
(577)
|
|
(552)
|
|
|
|
|
|
|
|
|
|
|
|
Operating
profit
|
|
227
|
|
236
|
|
228
|
|
455
|
|
466
|
|
|
|
|
|
|
|
|
|
|
|
Share of profit in
associates
|
|
–
|
|
6
|
|
3
|
|
3
|
|
9
|
|
|
|
|
|
|
|
|
|
|
|
Profit before
income tax expense
|
|
227
|
|
242
|
|
231
|
|
458
|
|
475
|
Income tax
expense
|
|
(59)
|
|
(60)
|
|
(61)
|
|
(120)
|
|
(121)
|
Profit for the
period
|
|
168
|
|
182
|
|
170
|
|
338
|
|
354
|
|
|
|
|
|
|
|
|
|
|
|
Profit attributable
to common shareholders
|
|
161
|
|
172
|
|
163
|
|
324
|
|
332
|
Profit attributable
to preferred shareholders
|
|
5
|
|
8
|
|
4
|
|
9
|
|
17
|
Profit attributable
to shareholders
|
|
166
|
|
180
|
|
167
|
|
333
|
|
349
|
Profit attributable
to non-controlling interests
|
|
2
|
|
2
|
|
3
|
|
5
|
|
5
|
|
|
|
|
|
|
|
|
|
|
|
Average number of
common shares outstanding (000's)
|
|
498,688
|
|
498,668
|
|
498,668
|
|
498,668
|
|
498,668
|
Basic earnings per
common share (C$)
|
|
0.32
|
|
0.35
|
|
0.33
|
|
0.65
|
|
0.67
|
HSBC Bank
Canada
|
Consolidated
Balance Sheet (Unaudited)
|
|
|
|
|
|
|
Figures in
C$m
|
30
June 2015
|
|
30
June 2014
|
|
31 December
2014
|
|
$m
|
|
$m
|
|
$m
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
Cash and balances at
central bank
|
60
|
|
66
|
|
73
|
Items in the course
of collection from other banks
|
96
|
|
87
|
|
76
|
Trading
assets
|
8,563
|
|
6,525
|
|
8,914
|
Derivatives
|
3,753
|
|
2,139
|
|
4,082
|
Loans and advances to
banks
|
965
|
|
438
|
|
1,264
|
Loans and advances to
customers
|
42,866
|
|
41,549
|
|
41,219
|
Reverse repurchase
agreements – non-trading
|
6,698
|
|
6,178
|
|
6,714
|
Financial
investments
|
20,896
|
|
19,774
|
|
20,122
|
Other
assets
|
341
|
|
418
|
|
345
|
Prepayments and
accrued income
|
198
|
|
189
|
|
186
|
Customers' liability
under acceptances
|
4,780
|
|
5,586
|
|
5,023
|
Property, plant and
equipment
|
115
|
|
132
|
|
124
|
Goodwill and
intangible assets
|
63
|
|
65
|
|
62
|
Total
assets
|
89,394
|
|
83,146
|
|
88,204
|
|
|
|
|
|
|
LIABILITIES AND
EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
Deposits by
banks
|
851
|
|
912
|
|
681
|
Customer
accounts
|
50,362
|
|
49,329
|
|
50,843
|
Repurchase agreements
– non-trading
|
4,744
|
|
2,246
|
|
4,054
|
Items in the course
of transmission to other banks
|
245
|
|
219
|
|
105
|
Trading
liabilities
|
4,956
|
|
3,492
|
|
4,227
|
Financial liabilities
designated at fair value
|
422
|
|
429
|
|
425
|
Derivatives
|
3,595
|
|
1,880
|
|
3,885
|
Debt securities in
issue
|
10,689
|
|
10,829
|
|
10,610
|
Other
liabilities
|
2,274
|
|
2,202
|
|
2,279
|
Acceptances
|
4,780
|
|
5,586
|
|
5,023
|
Accruals and deferred
income
|
443
|
|
499
|
|
524
|
Retirement benefit
liabilities
|
311
|
|
293
|
|
309
|
Subordinated
liabilities
|
239
|
|
239
|
|
239
|
Total
liabilities
|
83,911
|
|
78,155
|
|
83,204
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
Common
shares
|
1,225
|
|
1,225
|
|
1,225
|
Preferred
shares
|
850
|
|
350
|
|
350
|
Other
|
154
|
|
138
|
|
117
|
Retained
earnings
|
3,254
|
|
3,078
|
|
3,108
|
Total shareholders'
equity
|
5,483
|
|
4,791
|
|
4,800
|
Non-controlling
interests
|
–
|
|
200
|
|
200
|
Total
equity
|
5,483
|
|
4,991
|
|
5,000
|
Total equity and
liabilities
|
89,394
|
|
83,146
|
|
88,204
|
HSBC Bank
Canada
|
Condensed
Consolidated Statement of Cash Flows (Unaudited)
|
|
|
|
|
Figures in
C$m
|
Quarter
ended
|
|
Half-year
ended
|
|
30
June 2015
|
|
30
June 2014
|
|
31
March 2015
|
|
30
June 2015
|
|
30
June 2014
|
|
|
|
|
|
|
|
|
|
|
Cash flows generated
from/(used in):
|
|
|
|
|
|
|
|
|
|
|
– operating
activities
|
2,210
|
|
(15)
|
|
(1,373)
|
|
837
|
|
(1,856)
|
|
– investing
activities
|
(1,487)
|
|
(212)
|
|
684
|
|
(803)
|
|
2,033
|
|
– financing
activities
|
205
|
|
(340)
|
|
(95)
|
|
110
|
|
(432)
|
Net
increase/(decrease) in cash and cash equivalents
|
928
|
|
(567)
|
|
(784)
|
|
144
|
|
(255)
|
Cash and cash
equivalents, beginning of period
|
1,553
|
|
2,208
|
|
2,337
|
|
2,337
|
|
1,896
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
2,481
|
|
1,641
|
|
1,553
|
|
2,481
|
|
1,641
|
|
|
|
|
|
|
|
|
|
|
Represented
by:
|
|
|
|
|
|
|
|
|
|
|
– Cash and balances
at central bank
|
60
|
|
66
|
|
64
|
|
60
|
|
66
|
|
– Items in the course
of transmission to other banks, net
|
(149)
|
|
(132)
|
|
(14)
|
|
(149)
|
|
(132)
|
|
– Loans and advances
to banks of one month or less
|
965
|
|
438
|
|
950
|
|
965
|
|
438
|
|
– Reverse repurchase
agreements with banks of one month or less
|
777
|
|
992
|
|
402
|
|
777
|
|
992
|
|
– Treasury bills and
certificates of deposits of three months or less
|
828
|
|
277
|
|
151
|
|
828
|
|
277
|
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents, end of period
|
2,481
|
|
1,641
|
|
1,553
|
|
2,481
|
|
1,641
|
|
|
|
|
|
|
|
|
|
|
|
HSBC Bank
Canada
|
Global Business
Segmentation (Unaudited)
|
|
|
|
|
|
Quarter
ended
|
|
Half-year
ended
|
Figures in
C$m
|
30
June 2015 $m
|
|
30
June 2014 $m
|
|
31
March 2015 $m
|
|
30
June 2015 $m
|
|
30
June 2014 $m
|
|
|
|
|
|
|
|
|
|
|
Commercial
Banking
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
152
|
|
165
|
|
152
|
|
304
|
|
333
|
Net fee
income
|
78
|
|
81
|
|
80
|
|
158
|
|
160
|
Net trading
income
|
8
|
|
7
|
|
8
|
|
16
|
|
13
|
Gains less losses
from financial investments
|
–
|
|
16
|
|
–
|
|
–
|
|
16
|
Other operating
income
|
5
|
|
3
|
|
5
|
|
10
|
|
9
|
Total operating
income
|
243
|
|
272
|
|
245
|
|
488
|
|
531
|
Loan impairment
charges and other credit risk provisions
|
(19)
|
|
(18)
|
|
(11)
|
|
(30)
|
|
(30)
|
Net operating
income
|
224
|
|
254
|
|
234
|
|
458
|
|
501
|
Total operating
expenses
|
(106)
|
|
(104)
|
|
(101)
|
|
(207)
|
|
(205)
|
Operating
profit
|
118
|
|
150
|
|
133
|
|
251
|
|
296
|
Share of profit in
associates
|
–
|
|
6
|
|
3
|
|
3
|
|
9
|
Profit before income
tax expense
|
118
|
|
156
|
|
136
|
|
254
|
|
305
|
|
|
|
|
|
|
|
|
|
|
Global Banking and
Markets
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
43
|
|
46
|
|
48
|
|
91
|
|
90
|
Net fee
income
|
48
|
|
22
|
|
35
|
|
83
|
|
46
|
Net trading
income/(loss)
|
20
|
|
15
|
|
(6)
|
|
14
|
|
36
|
Gain less losses from
financial investments
|
18
|
|
11
|
|
36
|
|
54
|
|
30
|
Other operating
income
|
–
|
|
1
|
|
–
|
|
–
|
|
1
|
Total operating
income
|
129
|
|
95
|
|
113
|
|
242
|
|
203
|
Loan impairment
charges and other credit risk provisions
|
(1)
|
|
(2)
|
|
(1)
|
|
(2)
|
|
(3)
|
Net operating
income
|
128
|
|
93
|
|
112
|
|
240
|
|
200
|
Total operating
expenses
|
(34)
|
|
(29)
|
|
(31)
|
|
(65)
|
|
(59)
|
Profit before income
tax expense
|
94
|
|
64
|
|
81
|
|
175
|
|
141
|
|
|
|
|
|
|
|
|
|
|
Retail Banking and
Wealth Management
|
|
|
|
|
|
|
|
|
|
Net interest
income
|
100
|
|
104
|
|
94
|
|
194
|
|
206
|
Net fee
income
|
55
|
|
57
|
|
57
|
|
112
|
|
109
|
Net trading
income
|
6
|
|
3
|
|
6
|
|
12
|
|
8
|
Other operating
income
|
3
|
|
2
|
|
6
|
|
9
|
|
4
|
Total operating
income
|
164
|
|
166
|
|
163
|
|
327
|
|
327
|
Loan impairment
charges and other credit risk provisions
|
(3)
|
|
(7)
|
|
(4)
|
|
(7)
|
|
(20)
|
Net operating
income
|
161
|
|
159
|
|
159
|
|
320
|
|
307
|
Total operating
expenses
|
(143)
|
|
(135)
|
|
(136)
|
|
(279)
|
|
(268)
|
Profit before income
tax expense
|
18
|
|
24
|
|
23
|
|
41
|
|
39
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
Net interest
expense
|
(6)
|
|
(8)
|
|
(7)
|
|
(13)
|
|
(15)
|
Net trading
income
|
7
|
|
8
|
|
7
|
|
14
|
|
15
|
Net income/(expense)
from financial instruments designated at fair value
|
–
|
|
(1)
|
|
2
|
|
2
|
|
(3)
|
Other operating
income
|
4
|
|
7
|
|
7
|
|
11
|
|
13
|
Net operating
income
|
5
|
|
6
|
|
9
|
|
14
|
|
10
|
Total operating
expenses
|
(8)
|
|
(8)
|
|
(18)
|
|
(26)
|
|
(20)
|
Loss before income
tax expense
|
(3)
|
|
(2)
|
|
(9)
|
|
(12)
|
|
(10)
|
SOURCE HSBC Bank Canada