20th Nov 2006 09:15
HSBC Holdings PLC20 November 2006 HSBC BANK MALAYSIA BERHAD RESULTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2006 - HIGHLIGHTS • Profit before allowance for losses on loans and financing up 38.1 per cent to MYR782 million for the nine months ended 30 September 2006 (MYR566 million for the same period in 2005). • Profit before taxation of MYR706 million for the nine months ended 30 September 2006, MYR132 million or 23.1 per cent higher than the MYR574 million reported for the same period in 2005. • Cost efficiency ratio improved to 45.7 per cent from 50.2 per cent for the corresponding period in 2005. Net interest income for the nine months ended 30 September 2006 was up 21.6 percent to MYR723 million (MYR594 million for the same period in 2005). This wasprincipally driven by loan growth of MYR3.2 billion, or 14.8 per centyear-on-year. This favourable performance was also attributed to three upwardrevisions to our base lending rate (BLR) of 25 basis points each in December2005, February 2006 and April 2006 and the bank's strategy to focus on highermargin products. Other operating income for the nine months ended 30 September 2006 increased27.6 per cent to MYR594 million (MYR465 million for the same period in 2005).This was supported by: • foreign exchange trading profits due to increased hedging activity by corporates, and greater trading opportunities arising from foreign exchange rate volatility; and • profit gain from the disposal of a merchant acquiring credit card business in July 2006 to a joint venture between HSBC and Global Payments Inc. Income from Islamic banking operations rose by 61.2 per cent for the nine monthsended 30 September 2006 to MYR123 million (MYR76 million in the same period lastyear). This was due to growth in the bank's Islamic balance sheet - up MYR1.5billion, or 38.9 per cent, to MYR5.5 billion compared to the same period lastyear. Other operating expenses at MYR658 million (MYR570 million for the nine monthsended 30 September 2005) were up 15.4 per cent mainly as a result of higherstaff costs as total staff count increased, and higher inter-company expenses. Allowance for losses on loans and financing was MYR76 million for the ninemonths ended 30 September 2006 compared to net write-back of MYR7.5 million forthe nine months ended September 2005. This was mainly due to significantspecific allowance release from a number of large, previously non-performingloans in 2005. Total assets of MYR40.8 billion at 30 September 2006 grew by MYR4.3 billion, or11.6 per cent, compared with MYR36.5 billion at 31 December 2005, mainlyattributed to higher loans, advances and financing (up MYR3 billion or 13.8 percent). The increase in total assets was primarily funded by customer deposits (upMYR2.4 billion or 8.5 per cent compared to 31 December 2005) as a result ofvarious deposit campaigns run as part of our strategy to grow liabilities. Zarir J Cama, deputy chairman and CEO of HSBC Bank Malaysia Berhad, said: "HSBCBank Malaysia Berhad achieved a record profit before tax of MYR706 million inthe first nine months of the year, 23 per cent higher than the correspondingperiod in 2005. This demonstrates the success of our strategies, and I amconfident that we can sustain this momentum going forward. "We are well positioned to tap the business opportunities in areas of growth,amid the fast changing and expanding business environment under the MalaysianGovernment's liberalisation of the banking industry. We will continue to growour Islamic banking book and, at the same time, focus on our Takaful business tohelp position Malaysia as a global Islamic financial centre. During the quarter,we achieved one million credit cards in circulation and we are now one of thetop three credit card issuers in Malaysia. We will focus on increasing ourrevenue by deepening relationships with our existing and new customer base. Wewill also grow our SME portfolio by offering our clients customised business andtrade services. "In order to drive our business to the next level, we have focused on improvingcustomer service quality, introduced innovative products, enhanced productivityand increased brand visibility." UNAUDITED CONDENSED BALANCE SHEET AT 30 SEPTEMBER 2006 Group BankFigures in MYR '000s 30Sep06 31Dec05 30Sep06 31Dec05 Assets Cash and short-term funds 6,196,863 7,710,602 6,196,863 7,710,602Securities purchased under resale agreements 2,396,431 1,449,760 2,396,431 1,449,760Deposits and placements with banks and other financial institutions 1,231,157 479,942 1,231,157 479,942Securities held-for-trading 1,089,987 703,727 1,089,987 703,727Securities available-for-sale 3,587,203 3,284,735 3,587,203 3,284,735Loans, advances and financing 24,437,948 21,476,706 24,437,948 21,476,706Other assets 565,823 371,825 565,823 371,825Statutory deposits with Bank Negara Malaysia 898,448 698,948 898,448 698,948Investment in subsidiary companies - - 21 21Property, plant and equipment 302,573 304,916 302,573 304,916Intangible assets 21,474 5,228 21,474 5,228Deferred tax assets 72,000 59,851 72,000 59,851Total assets 40,799,907 36,546,240 40,799,928 36,546,261 Liabilities Deposits from customers 30,720,761 28,317,351 30,720,782 28,317,372Deposits and placements of banks and other financial institutions 2,849,630 1,954,799 2,849,630 1,954,799Obligations on securities sold under repurchased agreements 1,899,921 1,617,617 1,899,921 1,617,617Bills and acceptances payable 468,419 475,940 468,419 475,940Other liabilities 1,252,852 942,517 1,252,852 942,517Recourse obligation on loans sold to Cagamas Berhad 923,404 787,931 923,404 787,931Provision for taxation and zakat 64,723 29,716 64,723 29,716Total liabilities 38,179,710 34,125,871 38,179,731 34,125,892 Shareholders' funds Share capital 114,500 114,500 114,500 114,500Reserves 2,505,697 2,155,869 2,505,697 2,155,869Proposed dividend - 150,000 - 150,000Shareholders' funds 2,620,197 2,420,369 2,620,197 2,420,369 Total liabilities and shareholders' funds 40,799,907 36,546,240 40,799,928 36,546,261 Commitments and contingencies 63,288,414 47,716,860 63,288,414 47,716,860 UNAUDITED CONDENSED INCOME STATEMENT FOR THE THIRD QUARTER/PERIOD ENDED 30 SEPTEMBER 2006 Group and Bank Third quarter ended Nine months endedFigures in MYR '000s 30Sep06 30Sep05 30Sep06 30Sep05 Revenue 779,309 597,081 2,097,632 1,647,154 Interest income 465,174 368,905 1,285,463 1,062,897 Interest expense (211,870) (164,466) (562,903) (468,698) Net interest income 253,304 204,439 722,560 594,199 Other operating income 231,397 183,080 593,825 465,222 Income from Islamic banking operations 49,490 29,681 123,206 76,429 Operating income 534,191 417,200 1,439,591 1,135,850 Other operating expenses (211,912) (210,090) (657,687) (569,686) Profit before allowance 322,279 207,110 781,904 566,164 Allowance for losses on loans and financing (29,219) 30,325 (75,761) 7,533 Profit before taxation 293,060 237,435 706,143 573,697 Taxation (78,498) (67,439) (202,806) (163,310) Profit attributable to shareholders 214,562 169,996 503,337 410,387 Earnings per MYR0.50 ordinary share- basic/diluted 93.7 sen 74.2 sen 219.8 sen 179.2 sen Dividends per MYR0.50 ordinary share (net)- paid in respect of prior year - - 65.5 sen 43.7 sen- interim dividend paid 65.5 sen 52.4 sen 65.5 sen 52.4 sen Remarks: 1. Change in Accounting Policy During the nine months ended 30 September 2006, the bank adopted a newaccounting standard, FRS2 on Share-based Payment. FRS2 requires companies toadopt a fair-value-based method of accounting for share-based compensation planswhich takes into account vesting conditions related to market performance, forexample total shareholder return. Under this method, compensation cost ismeasured at the date of grant based on the assessed value of the award and isrecognised over the service period, which is usually the vesting period. Thefair value of share options granted is to be recognised in the income statement. The change in accounting policy has been accounted for by restating comparativesas disclosed in note 2 (a). 2. Comparative Figures The presentation and classification of items in the current third quarterfinancial statements have been consistent with the previous financial period/year except for the following: (a) Changes in accounting policy explained in note 1. Group Bank As As previously As previously As restated stated restated stated RM'000 RM'000 RM'000 RM'000Balance sheet at31Dec05Securities available -for-sale 3,284,735 3,277,490 3,284,735 3,277,490Other assets 371,825 376,829 371,825 376,829Deferred tax asset 59,851 53,547 59,851 53,547Other liabilities 942,517 917,761 942,517 917,761Reserves 2,155,869 2,172,080 2,155,869 2,172,080 Group and Bank As As previously restated stated RM'000 RM'000Income statement for the third financial quarter ended 30Sept05Other operating expenses 569,686 562,454Profit before allowance 566,164 573,396Profit before taxation 573,697 580,929Profit attributable to shareholders 410,387 415,594Earnings per RM0.50 share 179.2 sen 181.5 sen (b) Reclassification to conform the current years' presentation. Group and Bank As As previously restated stated RM'000 RM'000Balance sheet at 31Dec05Property, plant and equipment 304,916 310,144Intangible assets 5,228 - This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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