30th Apr 2009 13:00
30 April 2009
GRUPO FINANCIERO HSBC, S.A. DE C.V.
FIRST QUARTER 2009 FINANCIAL RESULTS - HIGHLIGHTS
Net income for the first quarter of 2009 was MXN798 million, down by MXN1,409 million or 63.8 per cent compared with MXN2,207 million for the same period in 2008.
Profit before tax for the first quarter of 2009 was MXN680 million, down by MXN2,396 million or 77.9 per cent compared with MXN3,076 million for the same period in 2008.
Total operating income before loan impairment charges for the first quarter of 2009 was MXN9,326 million, down by MXN312 million or 3.2 per cent compared with MXN9,638 million for the same period in 2008.
Gross loans and advances to customers were MXN170.8 billion at 31 March 2009, down by MXN31.1 billion or 15.4 per cent compared with MXN201.9 billion at 31 March 2008.
Deposits were MXN238.0 billion at 31 March 2009, down by MXN25.3 billion or 9.6 per cent compared with MXN263.3 billion at 31 March 2008.
The cost efficiency ratio was 52.1 per cent for the first quarter of 2009, compared with 54.0 per cent for the same period in 2008.
Return on equity was 8.8 per cent for the first quarter of 2009, compared with 23.4 per cent for the same period in 2008.
At 31 March 2009, the Bank's regulatory capital adequacy ratio was 12.4 per cent. The tier 1 capital ratio at 31 March 2009 was 9.7 per cent.
HSBC Mexico S.A. (the Bank) is Grupo Financiero HSBC, S.A. de C.V.'s (HSBC) primary subsidiary company and is subject to supervision by the Mexican Banking and Securities Commission. The Bank is required to file financial information on a quarterly basis (in this case for the quarter ended 31 March 2009) and this information is publicly available. Given that this information is available in the public domain, Grupo Financiero HSBC, S.A. de C.V. has elected to file this release.
Results are prepared in accordance with Mexican GAAP (Generally Accepted Accounting Principles).
Grupo Financiero HSBC, S.A. de C.V. is a 99.99 per cent directly owned subsidiary of HSBC Holdings plc (HSBC Group).
Overview
The first quarter of 2009 was challenging for Grupo Financiero HSBC, S.A de C.V. as the operating environment continued the deteriorating trends seen at the end of 2008. Mexico's economy is expected to contract by 3 per cent in 2009 while annual inflation is expected to fall to 3.5 per cent in 2009, compared to 6.5 per cent reported for 2008. During the first quarter of 2009 the Mexican Central Bank reduced interbank interest rates three times, from 8.25 per cent to 6.75* per cent. Volatility in the Mexican peso against the US dollar exchange rate continued during the first quarter of the year, increasing from 13.83 at 31 December 2008 to 14.15* at 31 March 2009.
In such a turbulent environment, Grupo Financiero HSBC, S.A. de C.V. focussed on maintaining a conservative approach to risk management, bringing new efficiencies to systems and processes and improving the services offered to customers.
At 31 March 2009, Grupo Financiero HSBC's net income was MXN798 million, MXN1,409 million less than the net income of the same period in 2008 (a decrease of 63.8 per cent). This result was largely due to increased loan impairment charges, particularly on credit card and corporate loan portfolios, reflecting the weakening in the economy.
The fall in profit before tax for the first quarter was exacerbated by the recognition of MXN1,041 million in the first quarter of 2008 arising from the sale of Visa Inc. US dollar denominated securities coupled with additional regulatory credit provisions in the first quarter of 2009 of MXN618 million relating to the corporate loan portfolio. Excluding the effect of these two items, the decrease in profit before tax for the first quarter of 2009 reduces to 36.2 per cent.
Net interest income decreased by MXN874 million to MXN5,377 million at 31 March 2009, a 14 per cent decrease compared to the same period in 2008. This result was largely driven by treasury's strategy of deploying a larger portion of surplus liquidity in low yielding investments offset with increased trading income. Additionally, while interest margins improved in the first quarter compared to first quarter of 2008, a reduction in commercial and consumer loan volumes negatively impacted net interest income.
Net fee income was MXN2,543 million at 31 March 2009, which represents a 13.3 per cent decrease compared to the same period in 2008. Grupo Financiero HSBC adopted a cautious approach to consumer lending in the first quarter and fee income decreased mainly from a fall in credit card revenues, account management fees and reductions in transaction volumes from ATMs and payments and cash management services.
Trading income was MXN1,406 million at 31 March 2009, which represents an increase of MXN951 million or 209.0 per cent compared to the same period in 2008. This is mainly due to a strong performance from trading positions as a result of market volatility during the quarter, partially offset by lower net interest income.
With an uncertain outlook for revenues, Grupo Financiero HSBC, S.A. de C.V.'s management continues to focus on active cost control. As a result, administrative expenses decreased by MXN345 million, or 6.6 per cent, to MXN4,857 million during the quarter to 31 March 2009 compared to the same period in 2008. This reflects a combination of selective investment to improve productivity and expense control. Cost savings were generated from a review of servicing certain customer propositions particularly those related to credit card promotions, and personnel expenses. The cost efficiency ratio was 52.1 per cent for the first quarter of 2009, an improvement of 1.9 per cent compared to the same period in 2008.
Net other income decreased by MXN476 million or 33.1 per cent to MXN962 million compared to the same period in 2008, when non recurring income of MXN1,041 million was generated from the sale of Visa Inc. US dollar denominated securities IPO shares. Other income of MXN1,309 million in the first quarter of 2009 was primarily generated from reimbursements of regional operating expenses and income from portfolio recoveries.
Loan impairment charges during the quarter to 31 March 2009 were MXN4,751 million, an increase of MXN1,953 million or 69.8 per cent compared to the same period in 2008. This increase is primarily the result of greater delinquency rates in the consumer loan portfolio, particularly credit cards, coupled with general weakening of credit quality reflecting the current economic market conditions. Additional credit provisions were also required in accordance with regulatory requirements for the commercial portfolio, specifically corporate loans as a result of changes in credit ratings.
Grupo Financiero HSBC's allowance for loan losses as a percentage of impaired loans was 137.8 per cent at 31 March 2009, compared to 134.0 per cent in the same period of 2008. Management continues to focus its efforts on improving asset quality by maintaining a more cautious approach to origination and risk management and strengthening collections operations. In addition, we continue to proactively support our customers with the 'Plan de Solución HSBC' promotion to optimise collections by working with our customers proactively to agree on revised repayment terms.
The non-bank subsidiaries, particularly HSBC Seguros, made a contribution to the results of MXN188 million or 23.6 per cent of total net income. Performance of our insurance business has been driven by the increase in sales of life insurance products, stable claims behaviour and good expense control.
Gross loans and advances to customers decreased by 15.4 per cent to MXN170.8 billion at 31 March 2009, compared to the same period of 2008. Reductions in the loan portfolio were mainly driven by decreases in consumer lending and commercial loans as a result of the combination of lower customer demand, prepayments on government loan portfolio and lower origination.
Total deposits decreased 9.6 per cent to MXN238.0 billion at 31 March 2009, of which demand deposits were MXN122.0 billion, 2.5 per cent lower than the same period in 2008. This reduction is mainly as a consequence of intense competition to attract deposits from the public. Time deposits, which include money market at 31 March 2009, decreased by MXN22.5 billion or 16.7 per cent due to lower market funding requirements.
In the first quarter of 2009, a dividend of MXN1,647 million was declared and paid to HSBC Holdings plc. The Bank remains strongly capitalised with a total capital ratio of 12.4 per cent at 31 March 2009, down 84 basis points compared to 13.2 per cent at 31 March 2008. Tier 1 capital ratio of 9.7 per cent.
Business highlights
Personal Financial Services
During the first quarter of 2009 this business segment continued implementing different strategies to promote the use of alternative distribution channels as the most convenient option for customers for a range of transactions. This included using the Bank's extensive network of ATMs and internet and telephone banking facilities. As of January 2009, foreign currency cash transactions in branches were migrated to alternative channels.
This business continues to actively promote the 'Plan de Solución HSBC' to its customers in order to enhance collections and provide revised repayment terms thus reducing delinquency.
There is a continuing focus on reinforcing deposit strategies through savings and investment products such as 'Cuenta Flexible HSBC' and 'Cuenta Ahorro HSBC' respectively.
As part of the worldwide launch, the HSBC Premier Family Services offer was launched in Mexico in February 2009, extending the Premier offering to family members and including additional services such as Family Financial Planning, Financial Education and Global Safety Net.
For the first quarter of 2009 the mortgage loan portfolio recorded an increase of MXN553 million or 2.9 per cent compared to same period in 2008. Consumer lending decreased by MXN8,351 million or 17.2 per cent compared to same period in 2008, in accordance with management focus on risk management and improving credit quality.
Commercial Banking
Asset quality in our commercial and corporate credit portfolios remained relatively stable. Interest income has increased and loan impairment charges have remained stable.
During the first quarter, we launched the 'Estimulo' nationwide campaign that focused on strengthening our packaged product offering aimed at small and medium sized businesses (PYMEs), achieving sales of more than 23,000 packages. In addition, HSBC launched the 'Por PYME' support programme, which offers assistance to SME customers who require extended repayment terms.
As at 31 March 2009, commercial loan portfolio has been affected by a MXN25.9 billion or 62 per cent decrease in the loans to government entities portfolio compared with the same period in 2008, as a result of several government loan prepayments.
Global Banking and Markets
The Global Banking and Markets segment showed solid performance during the first quarter of 2009. Despite lower customer volumes and reduced appetite for market risk, the volatility in the global financial markets and favourable positioning in foreign exchange have resulted in strong trading results.
Balance sheet management recorded improved results, which were partially offset by losses incurred from the sale of US dollar denominated securities.
Grupo Financiero HSBC was ranked first in the March 2009 Debt Capital Markets League Tables. This has supported the gradual reopening of the Mexican market, which had seen limited activity since late 2008. The main Debt Capital Market deals, in which our role was both joint lead manager and bookrunner, were MXN10,000 million from Petróleos Mexicanos, MXN3,500 million from Kimberly Clark de Mexico and MXN1,989 million from Coca Cola FEMSA.
The Global Banking segment continues to position its portfolio in line with market conditions and customer demand. The segment remains focused on working closely with our core relationships in order to best serve their financial situation and tailoring facilities to address difficult market conditions.
Subsequent events
At the end of April, Mexican authorities reported a swine flu outbreak in Mexico City. The impact of this is still to be determined. HSBC continues to monitor the situation closely and will take appropriate action. HSBC's primary focus is on the well being of our staff and their families.
About HSBC
Grupo Financiero HSBC, S.A. de C.V. is Mexico's fourth largest banking and financial services institution with 1,189 branches, 5,918 ATMs, approximately 7.8 million customer accounts and more than 19,500 employees. For more information, consult our website at www.hsbc.com.mx.
Grupo Financiero HSBC, S.A. de C.V. is a 99.99 per cent directly owned subsidiary of HSBC Holdings plc, and a member of the HSBC Group. With around 9,500 offices in 86 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa and assets of US$2,527 billion at 31 December 2008, HSBC is one of the world's largest banking and financial services organisations. HSBC is marketed worldwide as 'the world's local bank'.
*Source: Banxico (Banco de México) TIIE rate and FIX exchange rate
Grupo Financiero HSBC, S.A. de C.V.
Consolidated Balance Sheet
|
Figures in MXN millions |
GROUP |
BANK |
||||||
|
31 Mar |
31Mar |
31 Mar |
31 Mar |
|||||
|
2009 |
2008 |
2009 |
2008 |
|||||
|
Assets |
||||||||
|
Cash and deposits in banks |
86,326 |
53,961 |
85,756 |
53,961 |
||||
|
|
|
|||||||
|
Investment in securities |
118,622 |
64,293 |
118,211 |
62,971 |
||||
|
Trading securities |
76,932 |
30,874 |
76,857 |
29,939 |
||||
|
Available-for-sale securities |
32,681 |
29,469 |
32,345 |
29,082 |
||||
|
Held to maturity securities |
9,009 |
3,950 |
9,009 |
3,950 |
||||
|
Securities and derivative operations |
45,305 |
16,045 |
45,284 |
16,043 |
||||
|
Repurchase agreements |
770 |
47 |
749 |
45 |
||||
|
Derivative transactions |
44,535 |
15,998 |
44,535 |
15,998 |
||||
|
|
|
|||||||
|
Performing loans |
|
|
||||||
|
Commercial loans |
77,041 |
71,358 |
77,041 |
71,358 |
||||
|
Loans to financial intermediaries |
8,690 |
13,595 |
8,690 |
13,595 |
||||
|
Consumer loans |
40,098 |
48,449 |
40,098 |
48,449 |
||||
|
Mortgage loans |
19,531 |
18,978 |
19,531 |
18,978 |
||||
|
Loans to government entities |
15,800 |
41,672 |
15,800 |
41,672 |
||||
|
Total performing loans |
161,160 |
194,052 |
161,160 |
194,052 |
||||
|
Impaired loans |
|
|
||||||
|
Commercial loans |
2,319 |
2,381 |
2,319 |
2,381 |
||||
|
Consumer loans |
5,750 |
4,294 |
5,750 |
4,294 |
||||
|
Mortgage loans |
1,554 |
1,196 |
1,554 |
1,196 |
||||
|
Total impaired loans |
9,623 |
7,871 |
9,623 |
7,871 |
||||
|
Gross loans and advances to customers |
170,783 |
201,923 |
170,783 |
201,923 |
||||
|
Allowance for loan losses |
(13,258) |
(10,549) |
(13,258) |
(10,549) |
||||
|
Net loans and advances to customers |
157,525 |
191,374 |
157,525 |
191,374 |
||||
|
Other receivable accounts |
18,252 |
21,172 |
17,927 |
21,109 |
||||
|
Foreclosed assets |
117 |
89 |
117 |
89 |
||||
|
Property, furniture and equipment, net |
6,616 |
6,402 |
6,606 |
6,390 |
||||
|
Long-term investments in equity |
||||||||
|
securities |
3,322 |
3,037 |
149 |
146 |
||||
|
Deferred taxes |
3,254 |
1,142 |
3,278 |
1,087 |
||||
|
Goodwill |
2,749 |
2,749 |
- |
- |
||||
|
Other assets, deferred charges and |
||||||||
|
intangibles |
2,374 |
1,948 |
2,334 |
1,914 |
||||
|
Total assets |
444,462 |
362,212 |
437,187 |
355,084 |
||||
|
Figures in MXN millions |
GROUP |
BANK |
||||||
|
31 Mar |
31Mar |
31 Mar |
31 Mar |
|||||
|
2009 |
2008 |
2009 |
2008 |
|||||
|
Liabilities |
||||||||
|
Deposits |
237,981 |
263,256 |
238,153 |
263,393 |
||||
|
Demand deposits |
121,758 |
124,561 |
121,930 |
124,698 |
||||
|
Time deposits |
111,951 |
134,423 |
111,951 |
134,423 |
||||
|
Bonds |
4,272 |
4,272 |
4,272 |
4,272 |
||||
|
|
|
|||||||
|
Bank deposits and other liabilities |
7,658 |
7,245 |
7,658 |
7,245 |
||||
|
On demand |
170 |
- |
170 |
- |
||||
|
Short-term |
5,731 |
4,591 |
5,731 |
4,591 |
||||
|
Long-term |
1,757 |
2,654 |
1,757 |
2,654 |
||||
|
Securities and derivative transactions |
122,351 |
16,004 |
122,330 |
16,004 |
||||
|
Repurchase agreements |
76,581 |
73 |
76,560 |
73 |
||||
|
Derivative transactions |
45,770 |
15,931 |
45,770 |
15,931 |
|
|||
|
Other payable accounts |
33,946 |
36,239 |
33,541 |
35,142 |
||||
|
Income tax and employee profit |
||||||||
|
sharing payable |
1,004 |
1,610 |
955 |
1,546 |
||||
|
Sundry creditors and other accounts |
||||||||
|
payable |
32,942 |
34,629 |
32,586 |
33,596 |
||||
|
Subordinated debentures outstanding |
6,216 |
2,211 |
6,216 |
2,211 |
||||
|
Deferred credits |
487 |
438 |
487 |
438 |
||||
|
Total liabilities |
408,639 |
325,393 |
408,385 |
324,433 |
||||
|
Equity |
||||||||
|
Paid in capital |
21,466 |
21,466 |
15,883 |
15,883 |
||||
|
Capital stock |
8,210 |
8,210 |
4,272 |
4,272 |
||||
|
Additional paid in capital |
13,256 |
13,256 |
11,611 |
11,611 |
||||
|
Other reserves |
14,353 |
15,351 |
12,917 |
14,767 |
||||
|
Capital reserves |
1,648 |
1,162 |
14,314 |
10,577 |
||||
|
Retained earnings |
13,839 |
11,863 |
- |
2,196 |
||||
|
Result from the Mark-to-Market of |
||||||||
|
available-for-sale securities |
(1,932) |
- |
(1,940) |
256 |
||||
|
Cumulative effect of restatement |
- |
- |
- |
- |
||||
|
Gains on non-monetary asset |
||||||||
|
valuation |
- |
119 |
- |
- |
||||
|
Adjustment in the employee pension |
- |
- |
- |
(136) |
||||
|
Net income |
798 |
2,207 |
543 |
1,874 |
||||
|
Minority interest in capital |
4 |
2 |
2 |
1 |
||||
|
Total equity |
35,823 |
36,819 |
28,802 |
30,651 |
||||
|
Total liabilities and equity |
444,462 |
362,212 |
437,187 |
355,084 |
||||
|
Figures in MXN millions |
GROUP |
|||
|
31 Mar |
31 Mar |
|||
|
2009 |
2008 |
|||
|
Memorandum accounts |
||||
|
Transactions on behalf of third parties |
56,554 |
107,098 |
||
|
Customer current accounts |
(38) |
|
61 |
|
|
Customer bank |
- |
2 |
||
|
Settlement of customer securities and documents |
(38) |
|
59 |
|
|
Customer securities |
27,719 |
78,053 |
||
|
Customer securities in custody |
27,716 |
78,044 |
||
|
Pledged customers securities and documents |
3 |
9 |
||
|
Transactions on behalf of customers |
5,854 |
2,456 |
||
|
Customer repurchase transactions |
5,854 |
2,456 |
||
|
Other transactions on behalf of customers |
23,019 |
26,528 |
||
|
Investment on behalf of customers, net |
23,019 |
26,528 |
||
|
Other memorandum accounts |
571,890 |
599,291 |
||
|
Investment of the SAR funds |
- |
3,540 |
||
|
Integrated loan portfolio |
181,767 |
212,720 |
||
|
Other memorandum accounts |
390,123 |
383,031 |
||
|
Transactions for the group's own accounts |
1,642,572 |
1,867,574 |
||
|
Accounts for the group's own registry |
1,642,572 |
1,867,602 |
||
|
Contingent assets and liabilities |
131 |
- |
||
|
Credit commitments |
10,946 |
- |
||
|
Guarantees granted |
38 |
35 |
||
|
Irrevocable lines of credit granted |
- |
10,761 |
||
|
Goods in trust or mandate |
190,490 |
170,020 |
||
|
Goods in custody or under administration |
177,672 |
57,914 |
||
|
Amounts committed in transactions with |
||||
|
Fobaproa |
154 |
141 |
||
|
Amounts contracted in derivative operations |
1,263,141 |
1,628,602 |
||
|
Other contingent obligations |
- |
129 |
||
|
Repurchase/resale agreements |
||||
|
Securities receivable under repos |
5,846 |
46,160 |
||
|
(less) Repurchase agreements |
5,855 |
46,199 |
||
|
(9) |
|
(39) |
||
|
Reverse repurchase agreements |
5,855 |
3,629 |
||
|
(less) Securities deliverable under repos |
5,846 |
3,618 |
||
|
9 |
11 |
|||
|
Figures in MXN millions |
BANK |
|||
|
31 Mar |
31Mar |
|||
|
2009 |
2008 |
|||
|
Memorandum accounts |
||||
|
Guarantees granted |
38 |
35 |
||
|
Contingent assets and liabilities |
131 |
- |
||
|
Irrevocable lines of credit granted |
10,946 |
- |
||
|
Other contingent obligations |
- |
129 |
||
|
Irrevocable lines of credit granted |
- |
10,761 |
||
|
Goods in trust or mandate |
190,490 |
170,020 |
||
|
Goods in custody or under administration |
173,725 |
53,969 |
||
|
Collateral received by the institution |
749 |
- |
||
|
Third party investment banking operations, net |
23,019 |
26,528 |
||
|
Amounts committed in transactions with Fobaproa |
154 |
141 |
||
|
Amounts contracted in derivative operations |
1,263,141 |
1,628,602 |
||
|
Investments of retirement savings system funds |
- |
3,540 |
||
|
Integrated loan portfolio |
181,767 |
212,720 |
||
|
Other control accounts |
389,373 |
383,027 |
||
|
2,233,533 |
2,489,472 |
|||
|
Securities receivable under repos |
- |
43,715 |
||
|
(less) Repurchase agreements |
- |
(43,743) |
||
|
- |
(28) |
|||
|
Reverse repurchase agreements |
- |
1,173 |
||
|
(less) Securities deliverable under repos |
- |
(1,173) |
||
|
- |
- |
|||
Grupo Financiero HSBC, S.A. de C.V.
Consolidated Income Statement
|
Figures in MXN millions |
GROUP |
BANK |
|||||||||
|
31 Mar |
31 Mar |
31 Mar |
31 Mar |
||||||||
|
2009 |
2008 |
2009 |
2008 |
||||||||
|
Interest income |
8,749 |
9,392 |
8,656 |
9,389 |
|||||||
|
Interest expense |
(3,372 |
) |
(3,141 |
) |
(3,288 |
) |
(3,143 |
) |
|||
|
Net interest income |
5,377 |
6,251 |
5,368 |
6,246 |
|||||||
|
Loan impairment charges |
(4,751 |
) |
(2,798 |
) |
(4,751 |
) |
(2,798 |
) |
|||
|
Risk-adjusted net interest income |
626 |
3,453 |
617 |
3,448 |
|||||||
|
Fees and commissions receivable |
2,789 |
3,218 |
2,604 |
3,011 |
|||||||
|
Fees payable |
(246 |
) |
(286 |
) |
(257 |
) |
(280 |
) |
|||
|
Trading income |
1,406 |
455 |
1,404 |
455 |
|||||||
|
Total operating income |
4,575 |
6,840 |
4,368 |
6,634 |
|||||||
|
Administrative and personnel |
|||||||||||
|
expenses |
(4,857 |
) |
(5,202 |
) |
(4,754 |
) |
(5,083 |
) |
|||
|
Net operating income |
(282 |
) |
1,638 |
(386 |
) |
1,551 |
|||||
|
Other income |
1,309 |
1,673 |
1,319 |
1,694 |
|||||||
|
Other expenses |
(347 |
) |
(235 |
) |
(345 |
) |
(255 |
) |
|||
|
Net other income |
962 |
1,438 |
974 |
1,439 |
|||||||
|
Net income before taxes |
680 |
3,076 |
588 |
2,990 |
|||||||
|
Income tax and employee profit |
|||||||||||
|
sharing tax |
(1,180 |
) |
(1,694 |
) |
(1,137 |
) |
(1,650 |
) |
|||
|
Deferred income tax |
1,096 |
531 |
1,083 |
521 |
|||||||
|
Net income before subsidiaries |
596 |
1,913 |
534 |
1,861 |
|||||||
|
Undistributed income from |
|||||||||||
|
subsidiaries |
202 |
294 |
10 |
13 |
|||||||
|
Income from ongoing operations |
798 |
2,207 |
544 |
1,874 |
|||||||
|
Minority interest |
- |
- |
(1 |
) |
- |
||||||
|
Net income |
798 |
2,207 |
543 |
1,874 |
|||||||
Grupo Financiero HSBC, S.A. de C.V.
Consolidated Statement of Changes in Shareholders' Equity
GROUP
|
Figures in MXN millions |
Capital contributed |
Capital reserves |
Retained earnings |
Result from valuation of available-for-sale securities |
Net income |
Minority interest |
Total equity |
|
Balances at 31 December 2008 |
21,466 |
1,442 |
11,582 |
(2,335) |
4,110 |
5 |
36,270 |
|
|
|||||||
|
Movements inherent to the shareholders' decision |
|||||||
|
Capitalisation of retained earnings |
- |
206 |
3,904 |
- |
(4,110) |
- |
- |
|
Cash dividend |
- |
- |
(1,647) |
- |
- |
- |
(1,647) |
|
Total |
- |
206 |
2,257 |
- |
(4,110) |
- |
(1,647) |
|
Movements for the recognition of the comprehensive income |
|||||||
|
Net income |
- |
- |
- |
- |
798 |
- |
798 |
|
Other movements |
- |
- |
- |
403 |
- |
- |
403 |
|
Minority interest |
- |
- |
- |
- |
- |
(1) |
(1) |
|
Total |
- |
- |
- |
403 |
798 |
(1) |
1,200 |
|
Balances at 31 March 2009 |
21,466 |
1,648 |
13,839 |
(1,932) |
798 |
4 |
35,823 |
BANK
|
Figures in MXN millions |
Capital contributed |
Capital reserves |
Retained earnings |
Result from valuation of available-for-sale securities |
Net income |
Minority interest |
Total equity |
|
Balances at 31 December 2008 |
15,883 |
12,797 |
- |
(2,368) |
2,519 |
2 |
28,833 |
|
|
|
||||||
|
Movements inherent to the shareholders' decision |
|||||||
|
Constitution of reserves |
- |
1,517 |
(1,517) |
- |
- |
- |
- |
|
Transfer of result of prior years |
- |
- |
2,519 |
- |
(2,519) |
- |
- |
|
Cash dividend |
- |
- |
(1,002) |
- |
- |
- |
(1,002) |
|
Total |
- |
1,517 |
- |
- |
(2,519) |
- |
(1,002) |
|
|
|||||||
|
Movements for the recognition of the comprehensive income |
|||||||
|
Net income |
- |
- |
- |
- |
543 |
- |
543 |
|
Result from valuation of available- for-sale securities |
- |
- |
- |
428 |
- |
- |
428 |
|
Cumulative effect of restatement |
- |
- |
- |
- |
- |
- |
- |
|
Minority interest |
- |
- |
- |
- |
- |
- |
- |
|
Total |
- |
- |
- |
428 |
543 |
- |
971 |
|
Balances at 31 March 2009 |
15,883 |
14,314 |
- |
(1,940) |
543 |
2 |
28,802 |
Grupo Financiero HSBC, S.A. de C.V.
Consolidated Statement of Changes in Financial Position
GROUP
|
|
31Mar. 2009
|
|
31Mar. 2008
|
|
|
Operating activities:
|
|
|
|
|
|
Net income
|
798
|
|
2,207
|
|
|
Items included in operations not requiring (providing) funds:
|
|
|
|
|
|
Result from mark-to-market valuations
|
2,725
|
|
(546
|
)
|
|
Allowances for loan losses
|
4,751
|
|
2,798
|
|
|
Depreciation and amortisation
|
281
|
|
259
|
|
|
Deferred taxes
|
(1,096
|
)
|
(531
|
)
|
|
Undistributed income from subsidiaries, net
|
(202
|
)
|
(294
|
)
|
|
Others
|
(10)
|
|
-
|
|
|
Total operating items not requiring funds
|
7,247
|
|
3,893
|
|
|
|
|
|
|
|
|
Changes in items related to operations:
|
|
|
|
|
|
(Decrease) in deposits
|
(27,484
|
)
|
(3,701
|
)
|
|
(Increase) in loan portfolio
|
(2,200
|
)
|
(4,690
|
)
|
|
Decrease / (increase) in securities and derivative transactions, net
|
71,408
|
|
(253
|
)
|
|
(Increase) / decrease in financial instruments
|
(61,577
|
)
|
12,282
|
|
|
(Decrease) in bank deposits and other liabilities
|
(2,994
|
)
|
(363
|
)
|
|
Funds provided by operating activities
|
(15,600
|
)
|
7,168
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
Subordinated debentures outstanding
|
267
|
|
3
|
|
|
Cash dividend
|
(1,647
|
)
|
(4,350
|
)
|
|
Increase in other payable accounts
|
(3,605
|
)
|
9,920
|
|
|
Funds provided in financing activities
|
(4,985
|
)
|
5,573
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
Decrease in property, furniture and equipment, net
|
2,469
|
|
1,170
|
|
|
(Increase) / decrease in deferred charges or credits, net
|
(46
|
)
|
348
|
|
|
(Increase) in foreclosed assets
|
(22
|
)
|
(8
|
)
|
|
Decrease / (Increase) in other receivable accounts
|
30,349
|
|
(9,155
|
)
|
|
Funds used in investing activities
|
32,750
|
|
(7,645
|
)
|
|
Increase in cash and equivalents
|
12,165
|
|
5,096
|
|
|
Cash and equivalents at beginning of period
|
74,161
|
|
48,865
|
|
|
Cash and equivalents at end of period
|
86,326
|
|
53,961
|
|
BANK
|
Figures in MXN millions
|
31 Mar. 2009
|
|
31 Mar. 2008
|
|
|
|
Operating activities:
|
|
|
|
|
|
|
Net income
|
543
|
|
1,874
|
|
|
|
Items included in operations not requiring (providing) funds:
|
|
|
|
|
|
|
Result from mark-to-market valuations
|
2,725
|
|
(546
|
)
|
|
|
Allowances for loan losses
|
4,751
|
|
2,798
|
|
|
|
Depreciation and amortisation
|
281
|
|
259
|
|
|
|
Deferred taxes
|
(1,082
|
)
|
(521
|
)
|
|
|
Undistributed income from subsidiaries, net
|
(9
|
)
|
(13
|
)
|
|
|
Value loss estimation for foreclosed assets
|
2
|
|
2
|
|
|
|
Minority interest
|
1
|
|
-
|
|
|
|
Total operating items not requiring funds
|
7,212
|
|
3,853
|
|
|
|
|
|
|
|
|
|
|
Changes in items related to operations:
|
|
|
|
|
|
|
(Decrease) in deposits
|
(27,544
|
)
|
(3,632
|
)
|
|
|
(Increase) in loan portfolio
|
(2,200
|
)
|
(4,690
|
)
|
|
|
Decrease in securities and derivative transactions, net
|
68,696
|
|
120
|
|
|
|
(Increase) / decrease in financial instruments
|
(56,837
|
)
|
13,296
|
|
|
|
(Decrease) in bank deposits and other liabilities
|
(2,994
|
)
|
(363
|
)
|
|
|
Funds provided by operating activities
|
(13,667
|
)
|
8,584
|
|
|
|
|
|
|
|
|
|
|
Financing activities:
|
|
|
|
|
|
|
Subordinated debentures outstanding
|
267
|
|
3
|
|
|
|
Cash Dividend
|
(1,002
|
)
|
(3,500
|
)
|
|
|
(Decrease) / increase in other payable accounts
|
(3,745
|
)
|
8,978
|
|
|
|
Funds provided by financing activities
|
(4,480
|
)
|
5,481
|
|
|
|
|
|
|
|
|
|
|
Investing activities:
|
|
|
|
|
|
|
(Increase) in property, furniture and equipment, net
|
(266
|
)
|
(146
|
)
|
|
|
Decrease in deferred charges or credits, net
|
3
|
|
359
|
|
|
|
(Increase) in foreclosed assets
|
(22
|
)
|
(9
|
)
|
|
|
Decrease /(Increase) in other receivable accounts
|
30,585
|
|
(9,172
|
)
|
|
|
Funds used in investing activities
|
30,300
|
|
(8,968
|
)
|
|
|
Increase in cash and equivalents
|
12,153
|
|
5,097
|
|
|
|
Cash and equivalents at beginning of period
|
73,603
|
|
48,864
|
|
|
|
Cash and equivalents at end of period
|
85,756
|
|
53,961
|
|
|
|
|
|
|
|
|
|
Grupo Financiero HSBC, S.A. de C.V.
Differences between Mexican GAAP and International Financial Reporting Standards (IFRS)
Grupo Financiero HSBC
HSBC Holdings plc, the parent of Grupo Financiero HSBC S.A. de C.V. reports its results under International Financial Reporting Standards (IFRS). There follows a reconciliation of the results of Grupo Financiero HSBC S.A. de C.V. from Mexican GAAP to IFRS for the first quarter ended 31 March 2009 and an explanation of the key reconciling items.
|
|
|
|
|
31 Mar.
|
|
Figures in MXN millions
|
2009
|
|
|
|
|
Grupo Financiero HSBC – Net Income Under Mexican GAAP
|
798
|
|
|
|
|
Differences arising from:
|
|
|
|
|
|
Valuation of pensions and post retirement healthcare benefits**
|
18
|
|
Acquisition costs relating to long-term investment contracts**
|
(13)
|
|
Deferral of fees received and paid on the origination of loans
|
20
|
|
Recognition and provisioning for loan impairments**
|
327
|
|
Purchase accounting adjustments**
|
(6)
|
|
Recognition of the present value in-force of long-term insurance contracts**
|
2
|
|
Tax criteria
|
(51)
|
|
Other**
|
214
|
|
HSBC México net income under IFRS
|
1,309
|
|
US dollar equivalent (millions)
|
91
|
|
Add back tax expense
|
548
|
|
HSBC México profit before tax under IFRS
|
1,857
|
|
US dollar equivalent (millions)
|
129
|
|
Exchange rate used for conversion
|
14.4
|
**Net of tax at 28 per cent.
Summary of key differences between Grupo Financiero's results as reported under Mexican GAAP and IFRS
Valuation of pensions and post retirement healthcare benefits
Mexican GAAP
Obligations are recognised in the Income Statement of each year based on actuarial computations of the present value of those obligations using the projected unit credit method and real interest rates.
Unrecognised past service costs are amortised on an estimated service life of the employees.
IFRS
Obligations are recognised in the Income Statement of each year based on actuarial computations of the present value of those obligations using the projected unit credit method.
Actuarial gains and losses are recognised in stockholders equity as they arise.
Unrecognised past service cost are recognised in the Income Statement as they arise.
Acquisition costs of long-term investment contracts
Mexican GAAP
All costs related to the acquisition of long-term investment contracts are expensed as they are incurred.
IFRS
Incremental costs relating to the acquisition of long-term investment contracts are deferred and amortised over the expected life of the contract.
Fees paid and received on origination of loans
Mexican GAAP
All fees received on loan origination are deferred and amortised over the life of the loan using straight line method. However, this policy was introduced 1 January 2007, all fees having previously been recognised up front.
IFRS
Fees and expenses received or paid on origination of a loan that are directly attributable to the origination of that loan are accounted for under the effective interest rate method over the expected life of the loan. This policy has been in effect since 1 January 2005.
Loan impairment charges
Mexican GAAP
Loan impairment charges are calculated following the rules issued by the Mexican Ministry of Finance and the National Banking and Securities Commission. Such rules establish authorised methodologies for determining the amount of provision for each type of loan.
IFRS
Loan loss provisions for collectively assessed loans are determined based on a roll-rate methodology reflecting history of losses for each category of loan, past due payments and collateral values. For individually assessed loans, loan loss provisions are calculated based on the discounted cash flow value of the collateral.
Purchase accounting adjustments
These arise from valuations made by HSBC on acquiring Grupo Financiero Bital in November 2002 on various assets and liabilities that differed from the valuation in the local Mexican GAAP books.
Recognition of present value of in-force long-term life insurance contracts
Mexican GAAP
The present value of future earnings is not recognised. Premiums are accounted for on a received basis and reserves are calculated in accordance with guidance as set out by the Insurance Regulator (Comisión Nacional de Seguros y Fianzas).
IFRS
A value is placed on insurance contracts that are classified as long-term insurance business and are in-force at the balance sheet date. The present value of in-force long-term insurance business is determined by discounting future earnings expected to emerge from business currently in force using appropriate assumptions in assessing factors such as recent experience and general economic conditions.
ends/all
Related Shares:
HSBC Holdings