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HSBC Holdings PLC  -  HSBA   

HSBC Bank Malaysia Berhad 1Q 2013 Results

Released 09:30 17-Jun-2013

RNS Number : 1346H
HSBC Holdings PLC
17 June 2013
 



 

 

 

17 June 2013

 

 

HSBC BANK MALAYSIA BERHAD

RESULTS FOR THE QUARTER ENDED

31 MARCH 2013 - HIGHLIGHTS

 

·    Profit before tax for the three months ended 31 March 2013 was MYR381m, a decrease of MYR57m or 13.0% compared with the same period in 2012.

 

·    Operating income before loan impairment charges and other risk provisions reduced to MYR736m, a decrease of MYR32m or 4.1% compared with the same period in 2012.

 

·     Loan impairment charges and other credit risk provisions increased by MYR43m or 106.4% compared with the same period in 2012 primarily on higher net collective impairment provisions.

 

·    Cost efficiency ratio for the three months ended 31 March 2013 improved to 36.8% from 37.7% for the same period in 2012.

 

·    Total assets of MYR78.8bn at 31 March 2013 increased from MYR76.6bn at 31 December 2012 (31 March 2012: MYR73.2bn).

 

·    Core capital ratio and risk-weighted capital ratio remain strong at 10.5% and 13.2% respectively at 31 March 2013.

 

 

The financial statements of HSBC Bank Malaysia Berhad have been prepared in accordance with the applicable approved accounting standards issued by the Malaysian Accounting Standards Board.

 

 

 

 

 

 

CEO Commentary

Mukhtar Hussain, Deputy Chairman and Chief Executive Officer of HSBC Bank Malaysia Berhad ('the Bank'), commented: "Profit before tax for the three months ended 31 March 2013 was MYR381m, a decrease of MYR57m or 13.0% compared with the same period last year on lower revenue and higher loan and financing impairment charges, the impact of which was cushioned by reduced operating expenses. The decline in revenue was mainly due to the slowdown in the economy in the first quarter stemming from uncertainties leading up to the Malaysian General Elections, whilst the increase in loan and financing impairment charges was mainly on higher collective impairment provisions. Despite the lower operating profits, the cost efficiency ratio showed an improvement, from 37.7% for the first three months of 2012 to 36.8% for the three months ended 31 March 2013. The ongoing global restructuring efforts resulted in a leaner organisational structure and helped reduce operating expenses."

 

Financial commentary

HSBC Bank Malaysia Berhad reported profit before tax of MYR381m for the first three months of 2013, a decrease of 13.0% or MYR57m compared with the same period in 2012. The decline was mainly due to an increase in loan and financing impairment charges of MYR43m or 106.4% and a decrease in operating income of MYR31m or 4.1%. The reduction was partially offset by lower operating expenses by MYR18m or 6.2%.

 

Loan impairment charges and other credit risk provisions for the three months ended 31 March 2013 increased to MYR83m, mainly because of higher net collective impairment provisions (up MYR49m compared to the same period in 2012) due to the expansion in the customer loans and financing portfolio (up MYR 2.5 billion since 31 March 2012), with 40% of the growth from mortgages  and the remaining 60% growth from corporate term and trade financing.

 

The contraction of non-fund income was the main reason for the decrease in operating income, the largest decline of which was seen in fee income for the current period, primarily due to higher fee income earned in first three months of 2012 on various corporate finance-related deals. Income from Islamic banking fell, mainly on lower gains from trading securities, but this was partially offset by higher foreign currency gains and trading net interest income. Meanwhile, net interest income improved on an

expanded average loan base during the three month period from December 2012 to March 2013 compared against December 2011 to March 2012.

 

Other operating expenses for the three months ended 31 March 2013 showed some improvement at MYR271m (a decrease of MYR18m or 6.2%) compared with the same period in 2012, mainly on lower personnel costs (down MYR18m or 11.7%) as on-going restructuring efforts resulted in a leaner organisational structure. As such, despite lower operating profits, the cost efficiency ratio shows an improvement, from 37.7% for first three months of 2012 to 36.8% for three months ended 31 March 2013.

 

Total balance sheet size increased by MYR2.2bn or 2.9% from MYR76.6bn at 31 December 2012 to MYR78.8bn at 31 March 2013mainly driven by higher deposits from customers (31 March 2013: MYR61.7bn; 31 December 2012: MYR59.9bn).

 

 

Media enquiries to Marlene Kaur at +603 2075 3351 or marlenekaur@hsbc.com.my

 

Notes to editors:

 

1. HSBC in Malaysia

HSBC Bank Malaysia Berhad was locally incorporated in 1984 and is a wholly-owned subsidiary of The Hongkong and Shanghai Banking Corporation Limited (a company under the HSBC Group). In 2007, HSBC Bank Malaysia was the first locally incorporated foreign bank to be awarded an Islamic banking subsidiary licence in Malaysia, and HSBC Amanah Malaysia Berhad, a full-fledged Islamic bank wholly owned by HSBC Bank Malaysia, commenced operations in August 2008. HSBC in Malaysia has a network of 68 branches nationwide, of which 26 are HSBC Amanah Malaysia Berhad branches. In 2006, HSBC was the first foreign bank to be awarded a Takaful (Islamic insurance) license in Malaysia. HSBC Amanah Takaful (Malaysia) SdnBhd, a joint venture between HSBC Insurance (Asia Pacific) Holdings Limited (49% shareholding), Jerneh Asia Berhad (31% shareholding) and Employees Provident Fund Board of Malaysia (20% shareholding) commenced operations in August 2006.

 

2. The Hongkong and Shanghai Banking Corporation Limited

The Hongkong and Shanghai Banking Corporation Limited is the founding and a principal member of the HSBC Group which serves customers worldwide from around 6,600 offices in over 80 countries and territories in Europe, Hong Kong, Rest of Asia-Pacific, North and Latin America, and the Middle East and North Africa. With assets of US$2,681bn at 31 March 2013, the HSBC Group is one of the world's largest banking and financial services organisations.

 

 

 

 

 

 

 

Unaudited Condensed Statements of Financial Position at 31 March 2013

 


Group


Bank

Figures in MYR '000s

31 Mar 2013

31 Dec 2012

 

31 Mar 2013

 31 Dec 2012







Assets






Cash and short-term funds

14,770,098

12,663,437


12,542,370

11,014,117

Securities purchased under resale agreements

-

2,433,346


-

2,433,346

Deposits and placements with

  banks and other financial institutions

4,879,492

2,992,993


6,518,984

4,645,468

Financial assets held-for-trading

3,863,443

4,597,107


3,457,364

4,414,598

Financial investments available-for-sale

8,966,883

7,546,325


7,760,978

6,281,042

Loans, advances and financing

42,158,494

42,265,895


33,696,849

33,782,016

Other assets

2,302,901

2,196,564


2,360,114

2,209,665

Statutory deposits with Central Bank

1,303,160

1,330,159


968,098

986,598

Investments in subsidiary companies

-

-


660,021

660,021

Property and equipment

362,215

369,194


335,078

341,355

Intangible assets

53,219

53,525


53,195

53,496

Deferred tax assets

178,882

176,014


137,416

134,541

Total assets

78,838,787

76,624,559


68,490,467

66,956,263







Liabilities






Deposits from customers

61,654,556

59,938,046


52,122,277

51,298,258

Deposits and placements of banks

  and other financial institutions

6,243,450

6,117,046


6,231,326

6,007,271

Bills and acceptances payable

491,803

504,349


481,988

488,923

Other liabilities

2,726,578

2,646,149


2,844,454

2,625,929

Provision for taxation

33,154

14,168


28,966

10,861

Multi-Currency Sukuk Programme

500,000

500,000


-

-

Subordinated bonds

1,012,109

1,012,591


1,012,109

1,012,591

Total liabilities

72,661,650

70,732,349


62,721,120

61,443,833







Equity






Share capital

114,500

114,500


114,500

114,500

Reserves

5,762,637

5,477,710


5,354,847

5,097,930

Proposed dividend

300,000

300,000


300,000

300,000

Total equity attributable to shareholder of the

  Bank

6,177,137

5,892,210


5,769,347

5,512,430







Total liabilities and equity

78,838,787

76,624,559


68,490,467

66,956,263







Commitments and Contingencies

135,443,837

126,997,325


132,941,223

124,988,502

 

 

 

 

 

 

 

 

 

 

Unaudited Condensed Statements of Profit or Loss and Other Comprehensive Income

For The Financial Period Ended 31 March 2013

 




 Group


 Bank




 31 Mar 2013

 


 31 Mar 2012

Restated*


 31 Mar 2013

 


 31 Mar 2012

Restated*

Figures in MYR'000s








Revenue


       1,025,081


       1,057,375


          886,855


          916,116











Interest income 


           569,041


           572,815


           578,544


           589,675

Interest expense 

         (228,188)


         (239,824)


         (228,188)


         (239,824)

Net interest income 

           340,853


           332,991


           350,356


           349,851











Fee and commission income

           113,736


           134,118


           113,736


           134,118

Fee and commission expense

           (10,648)


             (6,125)


           (10,648)


             (6,125)

Net fee and commission income

           103,088


           127,993


           103,088


           127,993











Net trading income

           150,828


           160,550


           150,113


           160,910

Income from Islamic banking operations 

           127,371


           140,096


                    -  


                    -  

Other operating income 

             13,527


               5,758


             44,462


             31,413

Operating income before impairment losses

           735,667


           767,388


           648,019


           670,167











Loans / financing impairment charges and other credit risk provisions

           (83,408)


           (40,414)


           (51,306)


             (1,609)

Net operating income

           652,259


           726,974


           596,713


           668,558











Other operating expenses 

         (271,033)


         (288,926)


         (251,258)


         (267,796)

Profit before income tax expense

           381,226


           438,048


           345,455


           400,762











Income tax expense

           (97,316)


         (112,038)


           (88,427)


         (102,645)

Profit for the period

           283,910


           326,010


           257,028


           298,117











Other comprehensive income








Revaluation reserve:








Cash flow hedge









Effective portion of changes in fair value

                  (12)


                (384)


                  (12)


                (384)


Net amount transferred to profit or loss

                  (96)


                    -  


                  (96)


                    -  

Fair value reserve









Change in fair value

               5,423


             (3,841)


               4,090


             (3,502)


Amount transferred to profit or loss

             (7,631)


                    -  


             (7,631)


                    -  

Income tax relating to components of other comprehensive income

                  579


                  960


                  912


                  875

Other comprehensive income for the period, net of income tax

             (1,737)


             (3,265)


             (2,737)


             (3,011)

Total comprehensive income for the period

           282,173


           322,745


           254,291


           295,106











Profit attributable to the owner of the Bank

           283,910


           326,010


           257,028


           298,117

Total comprehensive income attributable to the owner of the Bank

           282,173


           322,745


           254,291


           295,106











Basic earnings per MYR0.50 ordinary share 

 124.0 sen


 142.4 sen


 112.2 sen


 130.2 sen











* 2012 figures restated due to changes in accounting policies. Full details are set out in Note 33 of HSBC Bank Malaysia Berhad's unaudited condensed interim financial statements dated 31 March 2013 which is available on www.hsbc.com.my

 


This information is provided by RNS
The company news service from the London Stock Exchange
 
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HSBC Bank Malaysia Berhad 1Q 2013 Results - RNS