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HSBC Bank Canada First Quarter 2013 Results


VANCOUVER, May 9, 2013 /CNW/ -


    --  Profit for the quarter ended 31 March 2013 was C$189m, a
        decrease of 14% compared with the same period in 2012.
    --  Profit attributable to common shareholders was C$171m for the
        quarter ended 31 March 2013, a decrease of 15% compared with
        the same period in 2012.
    --  Return on average common equity was 16.3% for the quarter ended
        31 March 2013 compared with 19.8% for the same period in 2012.
    --  The cost efficiency ratio improved to 45.0% for the quarter
        ended 31 March 2013 compared with 50.5% for the same period in
        2012.
    --  Total assets were C$84.4bn at 31 March 2013 compared with
        C$80.7bn at 31 March 2012.
    --  Total assets under administration increased to C$20.4bn at 31
        March 2013 from C$18.3bn at 31 March 2012.
    --  Common equity tier 1 capital ratio was 11.1%, tier 1 ratio
        13.9% and total capital ratio 15.9% at 31 March 2013 determined
        in accordance with regulatory guidelines and the Basel III
        capital adequacy framework adopted with effect from 1 January
        2013.
        The abbreviations "C$m" and "C$bn" represent millions and
        billions of Canadian dollars, respectively.
    HSBC                                                                                                                    

Financial Bank

Commentary Canada

Overview

HSBC Bank Canada recorded profit of C$189m for the first quarter of 2013, a decrease of C$30m, or 14%, compared with the first quarter of 2012, and an increase of C$35m, or 23%, compared with the fourth quarter of 2012. Profit attributable to common shareholders was C$171m for the first quarter of 2013, a decrease of C$30m, or 15%, compared with the first quarter of 2012, and an increase of C$34m, or 25%, compared with the fourth quarter of 2012.

The first quarter of 2012 included a gain on the sale of the full service brokerage business of C$84m and a restructuring charge of C$36m mostly relating to the wind-down of the consumer finance business. Excluding the impact of these items and their effect on income tax expense, profit increased by C$17m, or 8%, compared with the same quarter last year. The increase is mainly due to reduced operating expenses from strict cost control and continued delivery of organizational cost effectiveness programmes, which resulted in sustainable cost savings. Additionally contributing to the increase were higher gains on the disposal of available-for-sale financial investments, and a growth in trading income as a result of a change in valuation estimation methodology on derivatives. The increase is partially offset by lower net interest income mainly due to lower average retail and consumer finance loan balances following the strategic refocus of these businesses and continued pressure on net interest spread in a prolonged low interest rate environment.

The fourth quarter of 2012 included a C$42m charge resulting from the write down in the value of investment property. Excluding the charge resulting from the write down, profit in the first quarter of 2013 increased by C$66m compared with the prior quarter mainly due to higher gains on the disposal of available-for-sale financial investments, partially offset by higher specific provisions for commercial exposures notably in the energy and real estate sectors.

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

"We've enjoyed a good start to 2013, as a result of our focus on building our core businesses, deepening client relationships, and continued improvements in the efficiency of our operations in Canada, consistent with HSBC's global strategy. Our success is driven by our ability to connect internationally-minded Canadian businesses and individuals to opportunities around the world."

Analysis of Consolidated Financial Results for the First Quarter of 2013

Net interest income for the first quarter of 2013 was C$336m, a decrease of C$62m, or 16%, compared with the first quarter of 2012, and a decrease of C$12m, or 3%, compared with the fourth quarter of 2012. The decreases are mainly due to lower average retail and consumer finance loan balances following the strategic refocus of these businesses and continued pressure on net interest spread in a prolonged low interest rate environment.

Net fee income for the first quarter of 2013 was C$146m, an increase of C$3m, or 2%, compared with the first quarter of 2012, and a decrease of C$8m, or 5%, compared with the fourth quarter of 2012. The increase compared with the same quarter last year was due to a growth in authorized commercial credit facilities and higher funds under management. The decrease compared with the prior quarter is mainly due to a reduction in fee income from credit cards associated with lower transaction volume and a decrease in corporate finance fees.

Net trading income for the first quarter of 2013 was C$57m, an increase of C$17m, or 43% compared with the first quarter of 2012, and an increase of C$12m, or 27%, compared with the fourth quarter of 2012. Net trading income increased compared to both the first and fourth quarters of 2012 as a result of a change in estimation methodology in respect of credit and debit valuation adjustments on derivative contracts to reflect evolving market practises. In addition higher global customer trading volumes in foreign exchange products and improved performance in rates and credit products contributed to the increase. Net trading income in the first quarter of 2012 included losses caused by the narrowing of credit spreads on the carrying value of our own debt instruments classified as trading.

Net expense from financial instruments designated at fair value for the first quarter of 2013 was C$3m, compared with a net expense of C$14m in the first quarter of 2012, and was unchanged compared with the fourth quarter of 2012. The bank designates certain subordinated debentures to be recorded at fair value. Income and expense are largely as a result of the widening or narrowing of credit spreads decreasing or increasing the fair value of these subordinated debentures, respectively.

Gains less losses from financial investments for the first quarter of 2013 were C$35m, an increase of C$18m and C$31m respectively compared with the first quarter of 2012 and fourth quarter of 2012. The increases in gains less losses from financial investments are due to higher gains on the disposal of available-for-sale financial investments driven by balance sheet management activities.

Other operating income/(expense) for the first quarter of 2013 was C$13m, unchanged compared with the first quarter of 2012, and an increase of C$39m compared with the fourth quarter of 2012. The fourth quarter of 2012 included a C$42m charge resulting from the write down in the value of investment property.

Gain on the sale of the full service retail brokerage business. The sale of the full service retail brokerage business closed on 1 January 2012 and resulted in a gain of C$84m, net of assets written off and directly related costs. In the fourth quarter of 2012, the bank satisfied certain conditions relating to the sale of the full service retail brokerage business for which we recognized an increase to the gain of C$4m.

Loan impairment charges and other credit risk provisions for the first quarter of 2013 were C$56m, an increase of C$8m, or 17%, compared with the first quarter of 2012, and an increase of C$23m, compared with the fourth quarter of 2012. The increases are primarily due to higher specific provisions for commercial exposures notably in the energy and real estate sectors, partially offset by a reduction in collective consumer finance provisions due to improved delinquency performance.

Total operating expenses (excluding restructuring charges) for the first quarter of 2013 were C$263m, a decrease of C$45m, or 15%, compared with the first quarter of 2012, and a decrease of C$15m, or 5%, compared with the fourth quarter of 2012. The decreases in total operating expenses compared with both quarters are mainly due to strict cost control and continued delivery of our organizational cost effectiveness programmes, which resulted in sustainable cost savings. Cost reductions relating to the wind-down of the bank's consumer finance business as well as reduced activities and expenses related to the delivery of technology services to HSBC Group companies also contributed to a further decrease in total operating expense compared with the same quarter last year.

Restructuring charges of C$36m were recognized in the first quarter of 2012 mainly relating to the wind-down of the bank's consumer finance business.

Income tax expense. The effective tax rate in the first quarter of 2013 was 30.0%, compared with 25.2% in the first quarter of 2012 and 29.9% in the fourth quarter of 2012. The lower effective tax rate in the first quarter of 2012 was largely due to a lower effective tax rate applied to the gain on the sale of the full service retail brokerage business.

Statement of Financial Position

Total assets at 31 March 2013 were C$84.4bn, an increase of C$3.7bn from C$80.7bn at 31 December 2012, mainly due to increases of C$1.7bn in trading assets, C$1.2bn in loans and advances to banks, C$0.4bn in loans and advances to customers and C$0.4bn in customers' liability under acceptances. The growth in trading assets is due to a higher holding of government and agency bonds as a result of increased trading activity in the rates business and a higher holding in pending settlement trading accounts. Loans and advances to banks and loans and advances to customers increased as a result of an increase in reverse repurchase agreements. Excluding the increase in reverse repurchase agreements, loans and advances to banks increased marginally by C$0.1bn and loans and advances to customers decreased by C$0.5bn.

Liquid assets increased to C$25.9bn at 31 March 2013, compared to C$24.3bn at 31 December 2012 mainly as a result of strong deposit growth and debt issues mostly invested in short term investments. Refer to the 'Use of non-IFRS financial measures' for a definition of liquid assets.

Total liabilities at 31 March 2013 were C$78.9bn, an increase of C$3.6bn from C$75.3bn at 31 December 2012, mainly due to increases of C$1.7bn in debt securities in issue, C$1.3bn in trading liabilities and C$0.4bn in acceptances. The increase in debt securities in issue is due to an additional C$1.5bn of medium term notes and bearer deposits issued during the first quarter of 2013. The increase in trading liabilities is driven by an increase in short position securities to manage interest rate risk and a higher holding in pending settlement trading accounts.

Business Performance in the First Quarter of 2013

Commercial Banking

Profit before income tax expense was C$123m for the first quarter of 2013, a decrease of C$34m, or 22%, compared with the first quarter of 2012, and an increase of C$3m, or 3%, compared with the fourth quarter of 2012. The fourth quarter of 2012 included a C$42m charge resulting from the write down in the value of investment property. Excluding the impact of the write down, profit before income tax expense decreased compared with the same quarter last year and compared with the prior quarter due to higher specific impairment provisions in the energy and real estate sectors and lower net interest spread, partially offset by reduced operating expenses as a result of strict cost control and continued delivery of our organizational cost effectiveness programmes, which resulted in sustainable cost savings.

Global Banking and Markets

Profit before income tax expense was C$103m for the first quarter of 2013, an increase of C$17m, or 20%, compared with the first quarter of 2012 and an increase of C$34m, or 49%, compared with the fourth quarter of 2012. The increase in profit before income tax compared with the same quarter last year is due to higher gains on the disposal of available-for-sale investments and improved trading income as a result of a change in valuation estimation methodology on derivatives, higher global customer trading volumes in foreign exchange products and improved performance in rates and credit products. The increase is partially offset by a C$8m gain on the sale of the full service retail brokerage business included in the same quarter last year.

The increase in profit before income tax compared with the prior quarter is due to higher gains on the disposal of available-for-sale investments and improved trading income as a result of a change in valuation estimation methodology on derivatives, higher global customer trading volumes in foreign exchange products and improved performance in rates and credit products. The increase is partially offset by reduced net fee income driven by lower derivative sales and debt capital market fees.

Retail Banking and Wealth Management

Profit before income tax expense for the first quarter of 2013 was C$14m, a decrease of C$78m compared with first quarter of 2012, and an increase of C$11m compared with the fourth quarter of 2012. Profit before income tax in 2012 benefitted from a gain on the sale of the full service retail brokerage business partially offset by related restructuring charges. Excluding these items, profit before income tax expense decreased by C$4m compared with the same quarter last year and increased by C$15m compared with the prior quarter. The remaining decrease in profit before income tax expense compared with the same quarter last year is due to reduced net interest income driven by narrowing net interest spread and a decline in average loan balances partially offset by reduced operating expenses as a result of strict cost control and continued delivery of our organizational cost effectiveness programmes, which resulted in sustainable cost savings. The remaining increase in profit before income tax expense compared with the prior quarter is due to higher net interest income as a result of lower wholesale funding driven by strong growth in customer deposits, partially offset by a decline in average loan balances, and reduced operating expenses as a result of strict cost control and continued delivery of our organizational cost effectiveness programmes, which resulted in sustainable cost savings.

Consumer Finance

Profit before income tax expense was C$35m for the first quarter of 2013, an increase of C$52m compared with the first quarter of 2012, and an increase of C$5m compared with the fourth quarter of 2012. In the first quarter of 2012, C$34m in restructuring costs were incurred following the decision in March 2012 to wind-down the consumer finance business in Canada. Excluding the restructuring costs, profit before income tax expense increased by C$18m compared with the same quarter last year and C$5m compared with the prior quarter mainly due to lower operating expenses and loan impairment charges, partially offset by lower net interest income as a result of declining average loan balances.

Other

Activities or transactions which do not relate directly to the above business segments are reported in Other. The main items reported under Other include gains and losses from the impact of changes in credit spreads on our own subordinated debentures designated at fair value and revenue and expense related to information technology services provided to HSBC Group companies on an arm's length basis. Profit before income tax expense for the first quarter of 2013 was a loss of C$6m, compared with losses of C$28m and C$4m respectively for the first quarter of 2012 and the fourth quarter of 2012. The variances from comparative periods are primarily due to the impact of the items noted above.

Dividends

During the first quarter of 2013, the bank declared and paid C$90m in dividends on HSBC Bank Canada common shares, an increase of C$7m from the same period in 2012.

Regular quarterly dividends of 31.875 cents per share have been declared on HSBC Bank Canada Class 1 Preferred Shares - Series C, 31.25 cents per share on Class 1 Preferred Shares - Series D, 41.25 cents per share on Class 1 Preferred Shares - Series E and 7.75 cents per share on Class 2 Preferred Shares - Series B. Dividends will be paid on 30 June 2013, for shareholders of record on 14 June 2013.

Use of non-IFRS financial measures

HSBC Bank Canada uses certain non-IFRS financial measures to assess its performance. Non-IFRS financial measures are not defined by IFRS and do not have standardized meanings that would ensure consistency and comparability between companies using these measures. The following non-IFRS financial measures are used throughout this document and are defined below:

Return on average common equity - Profit attributable to common shareholders on an annualized basis divided by average common equity, which is calculated using month-end balances of common equity for the period.

Post-tax return on average assets - Profit attributable to common shareholders on an annualized basis divided by average assets, which is calculated using average daily balances for the period.

Post-tax return on average risk weighted assets - Profit attributable to common shareholders on an annualized basis divided by the average monthly balances of risk weighted assets for the period. Risk weighted assets are calculated using guidelines issued by OSFI in accordance with the Basel III capital adequacy framework (2012: Risk weighted assets are calculated using the guidelines issued by OSFI in accordance with the Basel II capital adequacy framework).

Cost efficiency ratio - Calculated as total operating expenses for the period divided by net operating income before loan impairment charges and other credit risk provisions for the period.

Adjusted cost efficiency ratio - Cost efficiency ratio adjusted to exclude gains and losses from financial instruments designated at fair value from net operating income before loan impairment charges.

Net interest income, net fee income and net trading income as a percentage of total operating income - Net interest income, net fee income and net trading income for the period divided by net operating income before loan impairment charges and other credit risk provisions for the period.

Ratio of customer advances to customer accounts - Loans and advances to customers divided by customer accounts, using period-end balances.

Average total shareholders' equity to average total assets - Average shareholders' equity is calculated using month-end balances of total shareholders' equity for the period and average total assets are calculated using average daily balances for the period.

Assets under administration - These are assets administered by the bank on behalf of our customers. The bank does not recognise these assets on its consolidated statement of financial position because our customers are the beneficial owners.

Liquid assets - These assets include high grade financial investments and reverse repurchase agreements of which a certain amount is pledged as collateral to secure recognized liabilities and contingent obligations within payment and depository clearing systems.

Caution concerning forward-looking statements

This document contains forward-looking information, including statements regarding the business and anticipated actions of HSBC Bank Canada. These statements can be identified by the fact that they do not pertain strictly to historical or current facts. Forward-looking statements often include words such as 'anticipates', 'estimates', 'expects', 'projects', 'intends', 'plans', 'believes', and words and terms of similar substance in connection with discussions of future operating or financial performance. By their very nature, these statements require us to make a number of assumptions and are subject to a number of inherent risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. We caution you to not place undue reliance on these statements as a number of risk factors could cause our actual results to differ materially from the expectations expressed in such forward-looking statements. These risk factors - many of which are beyond our control and the effects of which are difficult to predict - that could cause such differences include: capital management, credit, liquidity and funding, market, structural, and operational risks all of which are discussed in the Risk Management section in the Management's Discussion and Analysis of our Annual Report and Accounts 2012. Additional risk factors include: the impact of changes in laws and regulations including relating to the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations issued and to be issued thereunder, the Basel Committee on Banking Supervision's global standards for capital and liquidity reform, over-the-counter derivatives reform in Canada; technological changes and security; global capital market activity; the effects of changes in government monetary and economic policies; changes in prevailing interest rates; inflation levels; and the general business and economic market conditions in Canada and in geographic areas where we operate. Canada is an extremely competitive banking environment, and pressures on our net interest spread may arise from actions taken by individual banks or other financial institutions acting alone. Varying economic conditions may also affect equity and foreign exchange markets, which could also have an impact on our revenues. We caution you that the risk factors disclosed above are not exhaustive, and there could be other uncertainties and potential risk factors not considered here which may adversely affect our results and financial condition. Any forward-looking statements in this document speak only as of the date of this document. We do not undertake any obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether as a result of new information, subsequent events or otherwise, except as required under applicable securities legislation.

About HSBC Bank Canada

HSBC Bank Canada, a subsidiary of HSBC Holdings plc, is the leading international bank in Canada. With around 6,600 offices in over 80 countries and territories and assets of US$2,681bn at 31 March 2013, the HSBC Group is one of the world's largest banking and financial services organizations.

Copies of HSBC Bank Canada's first quarter 2013 report will be sent to shareholders in May 2013.

HSBC Bank Canada Summary


                                                                       
                                                     Quarter ended
                                      31 March   31 March   31 December
                                          2013       2012          2012

For the period (C$m)                                                   

Profit before income tax expense           269        290           218

Net operating income before loan                           
impairment charges and other credit
risk provisions                            584        681           526

Profit attributable to common                              
shareholders                               171        201           137
                                                                       

At period-end (C$m)                                                    

Shareholders' equity                     5,218      4,958         5,146

Loans and advances to customers (net                       
of impairment allowances)               46,003     45,395        45,572

Customer accounts                       48,184     47,037        48,304
                                                                       

Capital measures( (1))                                                 

Common equity tier 1 capital ratio                         
(%)                                       11.1          -             -

Tier 1 ratio (%)                          13.9       13.2          13.8

Total capital ratio (%)                   15.9       15.6          16.0

Assets-to-capital multiple                14.1       13.2          13.1

Risk-weighted assets (C$m)              36,171     36,460        36,668
                                                                       

Performance ratios (%)( (2))                                           

Return on average common equity           16.3       19.8          12.9

Post-tax return on average total                           
assets                                    0.82       0.99          0.66

Post-tax return on average                                 
risk-weighted assets ((1))                 1.9        2.2           1.5
                                                                       

Credit coverage ratio (%)                                              

Loan impairment charges as a                               
percentage of total operating income       9.6        7.0           6.3

Loan impairment charges as a                               
percentage of average gross customer
advances and                                                           
     acceptances                           0.4        0.4           0.3

Total impairment allowances                                
outstanding as a percentage of
impaired loans and                                                     
     acceptances at the period end        50.1       64.0          58.6
                                                                       

Efficiency and revenue mix ratios (%)                      
((2))                                                                  

Cost efficiency ratio                     45.0       50.5          52.9

Adjusted cost efficiency ratio            44.8       49.5          52.6

As a percentage of total operating                         
income:                                                                
     - net interest income                57.5       58.4          66.2
     - net fee income                     25.0       21.0          29.3
     - net trading income                  9.8        5.9           8.6
                                                                       

Financial ratios (%) ((2))                                             

Ratio of customer advances to                              
customer accounts                         95.5       96.5          94.3

Average total shareholders' equity to                      
average total assets                       6.2        6.2           6.2
                                                                       

Total assets under administration                          
(C$m)( (2))                                                            

Funds under management                  19,290     17,294        18,327

Custodial accounts                       1,121        961         1,133

Total assets under administration       20,411     18,255        19,460

1      Effective 1 January 2013, regulatory information is determined
       in accordance with the Basel III capital adequacy framework.
       Comparative regulatory information for 2012 periods, were not
       restated and are determined in accordance with the Basel II
       capital adequacy framework.

2      Refer to the 'Use of non-IFRS financial measures' section of
       this document for a discussion of non-IFRS financial measures.
    HSBC Bank Canada              Consolidated Income Statement (Unaudited)
                                                                       

Figures in C$m                                     Quarter ended

(except per share amounts)    31 March   31 March           31 December
                                  2013       2012                  2012
                                                                       

Interest income                    517        586                   534

Interest expense                 (181)      (188)                 (186)

Net interest income                336        398                   348
                                                                       

Fee income                         166        168                   178

Fee expense                       (20)       (25)                  (24)

Net fee income                     146        143                   154
                                                                       

Trading income excluding net                       
interest income                     47         32                    34

Net interest income on                             
trading activities                  10          8                    11

Net trading income                  57         40                    45
                                                                       

Net expense from financial                         
instruments designated at
fair value                         (3)       (14)                   (3)

Gains less losses from                             
financial investments               35         17                     4

Other operating income/                            
(expense)                           13         13                  (26)

Gain on the sale of the full                       
service retail brokerage
business                             -         84                     4

Net operating income before                        
loan impairment charges and                                            

other credit risk provisions 584 681 526

Loan impairment charges and other credit risk provisions (56) (48) (33)

Net operating income 528 633 493

Employee compensation and benefits (156) (191) (153)

General and administrative expenses (95) (105) (109)

Depreciation of property, plant and equipment (9) (9) (8)

Amortization and impairment of intangible assets (3) (3) (8)

Restructuring charges - (36) -

Total operating expenses (263) (344) (278)

Operating profit 265 289 215

Share of profit in associates 4 1 3

Profit before income tax expense 269 290 218

Income tax expense (80) (71) (64)

Profit for the period 189 219 154

Profit attributable to common shareholders 171 201 137

Profit attributable to preferred shareholders 15 15 15

Profit attributable to shareholders 186 216 152

Profit attributable to non-controlling interests 3 3 2

Average number of common shares outstanding (000's) 498,668 498,668 498,668

Basic earnings per common share 0.34 0.40 0.27

Effective 1 January 2013, HSBC Bank Canada adopted the revised IAS 19 Employee benefits on a retrospective basis and comparative information has been restated accordingly. More information relating to the restatement will be made available in our first quarter 2013 report.


         

HSBC Bank Canada          Consolidated Statement of Financial Position
                                                            (Unaudited)
    Figures in C$m            At 31 March    At 31 March     At 31 December
                                  2013          2012               2012
                                                                       

ASSETS                                                                 
                                                                       

Cash and balances at                62           141                 56
central bank

Items in the course of             135           127                 90
collection from other
banks

Trading assets                   6.975         5,751              5,272

Derivatives                      1,918         1,963              1,810

Loans and advances to            2,742         1,546              1,480
banks

Loans and advances to           46,003        45,395             45,572
customers

Financial investments           19,972        20,350             20,410

Other assets                     1,049           661                911

Prepayments and accrued            227           237                165
income

Customers' liability             5,092         4,356              4,737
under acceptances

Property, plant and                138           120                140
equipment

Goodwill and intangibles            71            75                 71
assets

Total assets                    84,384        80,722             80,714
                                                                       

LIABILITIES AND EQUITY                                                 
                                                                       

Liabilities                                                            

Deposits by banks                2,230         1,439              2,173

Customer accounts               48,184        47,037             48,304

Items in the course of              69           396                 71
transmission to other
banks

Trading liabilities              4,027         3,061              2,672

Financial liabilities              438         1,002                436
designated at fair value

Derivatives                      1,438         1,511              1,415

Debt securities in issue        13,720        14,006             11,980

Other liabilities                2,588         1,558              2,389

Acceptances                      5,092         4,356              4,737

Accruals and deferred              516           540                528
income

Retirement benefit                 308           304                309
liabilities

Subordinated liabilities           326           324                324

Total liabilities               78,936        75,534             75,338
                                                                       

Equity                                                                 

Common shares                    1,225         1,225              1,225

Preferred shares                   946           946                946

Other reserves                     276           317                281

Retained earnings                2,771         2,470              2,694

Total shareholders'              5,218         4,958              5,146
equity

Non-controlling interests          230           230                230

Total equity                     5,448         5,188              5,376

Total equity and                84,384        80,722             80,714
liabilities

Effective 1 January 2013, HSBC Bank Canada adopted the revised IAS 19
Employee benefits on a retrospective basis and comparative information
has been restated accordingly. More information relating to the
restatement will be made available in our first quarter 2013 report.

HSBC Bank Canada         Condensed Consolidated Statement of Cash Flows
                                                            (Unaudited)
                                                                       

Figures in C$m                                   Quarter ended
                         31 March   31 March                31 December
                             2013       2012                       2012

Cash flows generated                          
from/(used in):                                                        

- operating activities 887 (1,541) (1,088)

- investing activities 426 (1,330) 1,113

- financing activities (108) (101) (99)

Net increase/(decrease) in cash and cash equivalents 1,205 (2,972) (74)

Cash and cash equivalents, beginning of period 1,753 4,877 1,827

Cash and cash equivalents, end of period 2,958 1,905 1,753

Represented by:

- Cash and balances at central bank 62 141 56

- Items in the course of collection from other banks, net 66 (269) 19

- Loans and advances to banks of one month or less 2,742 1,546 1,480

- Treasury bills and certificates of deposits of three months or less 88 487 198

Cash and cash equivalents, end of period 2,958 1,905 1,753

Effective 1 January 2013, HSBC Bank Canada adopted the revised IAS 19 Employee benefits on a retrospective basis and comparative information has been restated accordingly. More information relating to the restatement will be made available in our first quarter 2013 report.

HSBC Bank Canada Global Business Segmentation (Unaudited)


                                                                       

We manage and report our
operations according to our                         
global businesses.                                                     

Figures in C$m                                     Quarter ended
                               31 March   31 March          31 December
                                   2013       2012                 2012
                                                                       

Commercial Banking                                                     

Net interest income                 161        180                  177

Net fee income                       75         71                   77

Net trading income                    8          8                    6

Other operating income/                             
(expense)                             2          5                 (40)

Net operating income before                         
loan impairment charges and
other credit risk provisions        246        264                  220

Loan impairment charges and                         
other credit risk provisions       (39)       (11)                  (6)

Net operating income                207        253                  214

Total operating expenses           (88)       (97)                 (97)

Operating profit                    119        156                  117

Share of profit in associates         4          1                    3

Profit before income tax                            
expense                             123        157                  120
                                                                       

Global Banking and Markets                                             

Net interest income                  42         46                   40

Net fee income                       18         19                   24

Net trading income                   37         22                   28

Gains less losses from                              
financial investments                33         17                    3

Other operating income/                             
(expense)                             -        (1)                    1

Gain on the sale of the full                        
service retail brokerage
business                              -          8                    -

Net operating income before                         
loan impairment charges and
other credit risk provisions        130        111                   96

Loan impairment charges and                         
other credit risk provisions          2          -                    -

Net operating income                132        111                   96

Total operating expenses           (29)       (25)                 (27)

Profit before income tax                            
expense                             103         86                   69
                                                                       

Retail Banking and Wealth                           
Management                                                             

Net interest income                  89        105                   82

Net fee income                       43         42                   44

Net trading income                    4          3                    3

Other operating income                3          2                    4

Gain on the sale of the full                        
service retail brokerage
business                              -         76                    4

Net operating income before                         
loan impairment charges and
other credit risk provisions        139        228                  137

Loan impairment charges and                         
other credit risk provisions        (7)        (6)                  (8)

Net operating income                132        222                  129

Total operating expenses                            
(excluding restructuring
charges)                          (118)      (128)                (126)

Restructuring charges                 -        (2)                    -

Profit before income tax                            
expense                              14         92                    3
                                                                       

Consumer Finance                                                       

Net interest income                  52         73                   57

Net fee income                       10         11                    9

Gains less losses from                              
financial investments                 2          -                    1

Other operating income                1          2                    1

Net operating income before                         
loan impairment charges and
other credit risk provisions         65         86                   68

Loan impairment charges and                         
other credit risk provisions       (12)       (31)                 (19)

Net operating income                 53         55                   49

Total operating expenses                            
(excluding restructuring
charges)                           (18)       (38)                 (19)

Restructuring charges                 -       (34)                    -

Profit/(loss) before income                         
tax expense                          35       (17)                   30
                                                                       

Other                                                                  

Net interest expense                (8)        (6)                  (8)

Net trading income                    8          7                    8

Net loss from financial                             
instruments designated at fair
value                               (3)       (14)                  (3)

Other operating income                7          5                    8

Net operating income/(expense)        4        (8)                    5

Total operating expenses           (10)       (20)                  (9)

Loss before income tax expense      (6)       (28)                  (4)

Effective 1 January 2013, HSBC Bank Canada adopted the revised IAS 19
Employee benefits on a retrospective basis and comparative information
has been restated accordingly. More information relating to the
restatement will be made available in our first quarter 2013 report.

 

  

Media enquiries to: 

Ernest Yee  604-641-2973 

Sharon Wilks  416-868-3878

SOURCE: HSBC Bank Canada

To view this news release in HTML formatting, please use the following URL: 
http://www.newswire.ca/en/releases/archive/May2013/09/c5040.html

CO: HSBC Bank Canada
ST: British Columbia
NI: FIN ERN 

-0- May/09/2013 08:15 GMT

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