HSBC Bank Canada recorded profit of $130 million for the second quarter of 2013, a decrease of 31% compared with the first quarter of 2013, and 35% compared with the same period last year.
This decline is mainly due to lower operating income as a result of: a reduction in fair value of an investment property held for sale; higher loan impairment charges from increased specific provisions; and lower gains on the disposal of available-for-sale financial investments, says the bank. The decrease is also due to lower net interest income from narrowing net interest spread, partially offset by lower operating expenses, which resulted in sustainable cost savings.
“The bank continues to report a good level of profitability amid a challenging interest rate environment 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,” says Paulo Maia, president and CEO of HSBC Bank Canada.
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Additional findings include:
- Profit attributable to common shareholders was $113 million for the quarter ended 30 June 2013, a decrease of 39% compared with the same period in 2012. Profit attributable to common shareholders was $284 million for the first half of 2013, a decrease of 26% compared with the same period in 2012;
- Return on average common equity was 10.6% for the quarter and 13.4% for the first half of 2013 compared with 18.4% and 19.1% respectively for the same periods in 2012;
- The cost efficiency ratio was 50.1% for the 2013 quarter, compared with 45.4% last year;
- Total assets were $84.3 billion, compared with $82.1 billion in 2012;
- Total assets under administration increased to $20.3 billion in Q1, from $18.3 billion in 2012;
- Common equity tier 1 capital ratio was 10.8%, tier 1 ratio 13.6% and the total capital ratio 15.5% determined using regulatory guidelines in accordance with the Basel III capital adequacy framework.