3rd Mar 2008 08:20
HSBC Holdings PLC03 March 2008 Contents The financial information in this news release is based on the auditedconsolidated financial statements of Hang Seng Bank Limited ('the bank') and itssubsidiaries and associates ('the group') for the year ended 31 December 2007. ..Highlights of Results..Chairman's Comment..Chief Executive's Review..Results Summary..Customer Group Performance..Mainland Business..Contents..Consolidated Income Statement..Consolidated Balance Sheet..Consolidated Statement of Recognised Income and Expense..Consolidated Cash Flow Statement..Financial Review....Net interest income....Net fee income....Trading income....Net income from financial instruments designated at fair value....Other operating income....Analysis of income from wealth management business....Loan impairment charges and other credit risk provisions....Operating expenses....Profit on disposal of fixed assets and financial investments....Gains on dilution of investment in associate....Tax expense....Earnings per share....Dividends per share....Segmental analysis....Analysis of assets and liabilities by remaining maturity....Cash and balances with banks and other financial institutions....Placings with and advances to banks and other financial institutions....Trading assets....Financial assets designated at fair value....Advances to customers....Loan impairment allowances against advances to customers....Impaired advances and allowances....Overdue advances....Rescheduled advances....Segmental analysis of advances to customers by geographical area....Gross advances to customers by industry sector....Financial investments....Amount due from/to immediate holding company and fellow subsidiary companies....Investments in associates....Intangible assets....Other assets....Current, savings and other deposit accounts....Certificates of deposit and other debt securities in issue....Trading liabilities....Other liabilities....Subordinated liabilities....Shareholders' funds....Capital resources management....Liquidity ratio....Reconciliation of cash flow statement....Contingent liabilities, commitments and derivatives....Statutory accounts and accounting policies....Comparative figures....Acquisition....Property revaluation....Foreign currency positions....Post balance sheet event....Ultimate holding company....Register of shareholders....Proposed timetable for 2008 quarterly dividends....Code on corporate governance practices....Board of directors....News release Consolidated Income Statement Year ended Year endedFigures in HK$m 31Dec07 31Dec06 Interest income 34,406 29,262Interest expense (19,687) (17,568)Net interest income 14,719 11,694Fee income 7,682 4,074Fee expense (796) (577)Net fee income 6,886 3,497Trading income 1,679 1,330Net income from financial instruments designated at fair value 1,907 899Dividend income 52 47Net earned insurance premiums 9,702 7,846Other operating income 747 845Total operating income 35,692 26,158Net insurance claims incurred and movement in policyholders' liabilities (10,677) (8,077)Net operating income before loan impairment charges and other credit risk provisions 25,015 18,081Loan impairment charges and other credit risk provisions (576) (264)Net operating income 24,439 17,817Employee compensation and benefits (3,585) (2,694)General and administrative expenses (2,684) (2,214)Depreciation of premises, plant and equipment (348) (323)Amortisation of intangible assets (33) (10)Total operating expenses (6,650) (5,241)Operating profit 17,789 12,576Gain on dilution of investment in associate 1,465 _Profit on disposal of fixed assets and financial investments 716 843Net surplus on property revaluation 379 321Share of profits from associates 1,122 655Profit before tax 21,471 14,395Tax expense (2,865) (2,049)Profit for the year 18,606 12,346 Profit attributable to shareholders 18,242 12,038Profit attributable to minority interests 364 308 18,606 12,346 Dividends 12,045 9,942Earnings per share (in HK$) 9.54 6.30 With effect from 2006, interest income and interest expense for allinterest-bearing financial instruments are reported in 'Interest income' and'Interest expense' respectively in the income statement. The change from theHSBC Group presentation described below has been made principally to match theinterest expense arising from trading liabilities with the interest income fromnon-trading assets. This facilitates the comparison of Hang Seng's net interestincome and net interest margin with peer banks in Hong Kong. The HSBC Group reports interest income and interest expense arising fromfinancial assets and financial liabilities held for trading as 'Net tradingincome' and arising from financial instruments designated at fair value throughprofit and loss as 'Net income from financial instruments designated at fairvalue' (other than for debt securities in issue and subordinated liabilities,together with derivatives managed in conjunction with them). The table below presents the interest income and interest expense of Hang Seng,as included within the HSBC Group accounts: Year ended Year endedFigures in HK$m 31Dec07 31Dec06 Interest income 33,701 28,639Interest expense (17,343) (15,000)Net interest income 16,358 13,639Net interest income and expense reported as 'Net trading income' (1,753) (2,039)Net interest income and expense reported as 'Net income from financial instruments designated at fair value' 114 94 Consolidated Balance Sheet Figures in HK$m At 31Dec07 At 31Dec06 AssetsCash and balances with banks and other financial institutions 16,864 9,390Placings with and advances to banks and other financial institutions 113,029 99,705Trading assets 10,390 12,467Financial assets designated at fair value 13,892 8,280Derivative financial instruments 4,702 1,887Advances to customers 308,356 279,353Financial investments 244,294 227,710Investments in associates 6,177 3,488Investment properties 2,581 2,732Premises, plant and equipment 6,794 6,516Interest in leasehold land held for own use under operating lease 565 580Intangible assets 2,889 2,070Other assets 15,466 14,886 745,999 669,064LiabilitiesCurrent, savings and other deposit accounts 546,653 482,821Deposits from banks 19,736 17,950Trading liabilities 48,151 60,093Financial liabilities designated at fair value 1,498 1,562Derivative financial instruments 4,683 1,531Certificates of deposit and other debt securities in issue 5,685 7,595Other liabilities 17,850 16,123Liabilities to customers under insurance contracts 33,089 22,975Deferred tax and current tax liabilities 2,844 2,716Subordinated liabilities 9,354 7,000 689,543 620,366Capital resourcesMinority interests _ 1,717Share capital 9,559 9,559Retained profits 32,873 29,044Other reserves 8,288 4,745Proposed dividends 5,736 3,633Shareholders' funds 56,456 46,981 56,456 48,698 745,999 669,064 Consolidated Statement of Recognised Income and Expense Year ended Year endedFigures in HK$m 31Dec07 31Dec06 Unrealised surplus on revaluation of premises, net of tax 443 519Tax on realisation of revaluation surplus on disposal of premises 45 106Available-for-sale investments reserve, net of tax:- fair value changes taken to equity 1,594 1,232- fair value changes transferred to income statement -- on impairment _ 12 -- on hedged items (181) 21 -- on disposal (444) (325)Cash flow hedges reserve, net of tax:- fair value changes taken to equity 146 (179)- fair value changes transferred to income statement 218 442Actuarial (losses)/gains on defined benefit plans, net of tax (1,243) 218Exchange differences on translation of financial statements of overseas branches, subsidiaries and associates 527 184Net income recognised directly in equity 1,105 2,230Profit for the year 18,606 12,346Total recognised income and expense for the year 19,711 14,576 Attributable to shareholders 19,347 14,268Attributable to minority interests 364 308 19,711 14,576 Consolidated Cash Flow Statement Year ended Year endedFigures in HK$m 31Dec07 31Dec06 Net cash inflow from operating activities 21,070 53,541 Cash flows from investing activities Dividends received from associates 207 33Purchase of available-for-sale investments (90,693) (101,258)Purchase of held-to-maturity debt securities (504) (351)Proceeds from sale or redemption of available-for-sale investments 91,813 69,279Proceeds from sale or redemption of held-to-maturity debt securities 43 38Purchase of fixed assets and intangible assets (540) (379)Proceeds from sale of fixed assets and assets held for sale 1,130 3,130Interest received from available-for-sale investments 9,756 6,557Dividends received from available-for-sale investments 49 45Net cash outflow from increase in stake of subsidiaries (2,409) _Net cash inflow/(outflow) from investing activities 8,852 (22,906) Cash flows from financing activitiesDividends paid (9,942) (9,942)Interest paid for subordinated liabilities (473) (332)Proceeds from subordinated liabilities 2,342 3,489Net cash outflow from financing activities (8,073) (6,785) Increase in cash and cash equivalents 21,849 23,850 Cash and cash equivalents at 1 January 90,275 65,513Effect of foreign exchange rate changes 1,350 912Cash and cash equivalents at 31 December 113,474 90,275 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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