HSBC

HSBC Bank Canada results for the fourth quarter and year ended 31 December 2010 - highlights

Press Release   •   Feb 23, 2011 09:38 GMT

  • Reported net income attributable to common shares was C$104 million for the quarter ended 31 December 2010, a decrease of 29.7 per cent over the same period in 2009.*
  • Reported net income attributable to common shares was C$429 million for the year ended 31 December 2010, a decrease of 4.2 per cent compared with C$448 million for the year ended 31 December 2009.*
  • Return on average common equity was 11.4 per cent for the quarter ended 31 December 2010 and 12.1 per cent for the year ended 31 December 2010 compared with 17.3 per cent and 13.1 per cent, respectively, for the same periods in 2009.*
  • The cost efficiency ratio was 56.9 per cent for the quarter ended 31 December 2010 and 57.4 per cent for the year ended 31 December 2010 compared with 47.6 per cent and 51.4 per cent, respectively, for the same periods in 2009.
  • Total assets were C$71.5 billion at 31 December 2010, an increase of C$0.2 billion, or 0.3 per cent, from C$71.3 billion at 31 December 2009.
  • Total funds under management were C$31.5 billion at 31 December 2010, an increase of C$3.3 billion, or 11.7 per cent, from C$28.2 billion at 31 December 2009.
  • Tier 1 capital ratio of 13.3 per cent and a total capital ratio of 16.0 per cent at 31 December 2010 compared to 12.1 per cent and 14.9 per cent respectively at 31 December 2009.*

Results are prepared in accordance with Canadian generally accepted accounting principles. On 1 January 2011, the Bank transitioned to International Financial Reporting Standards and future results will be prepared and disclosed on that basis.

* Calculated using guidelines issued by the Office of the Superintendent of Financial Institutions in accordance with Basel II capital adequacy framework.

Overview

HSBC Bank Canada recorded net income attributable to common shares for the fourth quarter of 2010 of C$104 million, a decrease of C$44 million, or 29.7 per cent compared with the C$148 million reported in the same period in 2009. Net income attributable to common shares for the year ended 31 December 2010 was C$429 million, compared with the C$448 million reported in the same period in 2009, a decrease of C$19 million or 4.2 per cent. The results were impacted by fair value accounting on economic hedges and changes in the market values of certain non-trading financial assets and liabilities, which are recorded in the Global Banking and Markets business. Even though no economic gain or loss occurred, these adjustments resulted in a mark-to-market loss of C$196 million in 2010, compared to a gain of C$69 million in 2009. Income before income taxes excluding these items increased by 37.8 per cent for the year ended 31 December 2010, compared to the same period in 2009.

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

"Improving economic conditions, a reduction in credit losses and HSBC's strong business fundamentals delivered another solid set of operating results for 2010. We continued to focus on generating growth, building on our global capabilities to meet our customer needs, while maintaining strong capital and liquidity levels.

"We expect the economy to show modest but continued improvement through 2011 and HSBC is very strongly placed to support our clients' growth ambitions as the Canadian employment picture improves and trade with emerging markets increases."

Read the full media release (12 page pdf 139k).