11th May 2007 09:15
HSBC Holdings PLC11 May 2007 HSBC BANK MALAYSIA BERHAD RESULTS FOR THE THREE MONTHS ENDED 31 MARCH 2007 - HIGHLIGHTS • Profit before allowance for losses on loans and financing increased by 42.5 per cent to MYR316 million for the three months ended 31 March 2007 (MYR222 million for the same period in 2006). • Profit before taxation of MYR308 million for the three months ended 31 March 2007 was 48.2 per cent higher than the MYR208 million reported for the same period in 2006. • Cost efficiency ratio improved to 40.6 per cent from 47.6 per cent for the corresponding period in 2006. • Net interest income for the three months ended 31 March 2007 up 20.5 per cent to MYR274 million (MYR227 million for the same period in 2006). • Income from Islamic banking operations rose by 75.8 per cent for the three months ended 31 March 2007 to MYR55 million (MYR31 million in the same period last year). • Total assets grew by MYR6.9 billion, or 19.1 per cent, to MYR43.5 billion at 31 March 2007 compared with MYR36.6 billion at 31 March 2006. HSBC Bank Malaysia Berhad reported its highest ever quarterly result in thefirst quarter of 2007. This reflected improved performance across most of thebank's businesses, in particular in consumer and commercial banking. The bank'sprofit before tax of MYR308 million was 48.2 per cent higher than for the sameperiod in 2006. Higher net interest income was principally driven by year-on-year growth inlending of MYR2.0 billion, or 9.1 per cent, in higher margin products, includingcards and consumer finance, as well as widening spreads. Total assets grew by MYR6.9 billion, or 19.1 per cent, mainly attributable tothe growth in customer deposits (up MYR5.6 billion or 19.9 per cent compared to31 March 2006), primarily as a result of successful marketing campaigns. Income from Islamic banking operations rose strongly, by 75.8 per cent, due togrowth in Islamic financing, mainly in consumer credit, and improved profitmargins. Other operating income was up 23.3 per cent to MYR203 million from MYR164million for the same period in 2006. This was mainly attributable to higherforeign exchange profits due to strengthening of the Malaysian ringgit andfurther liberalisation of the Central Bank's foreign exchange administrativerules which resulted in higher hedging activities by corporates. Zarir J Cama, deputy chairman and CEO of HSBC Bank Malaysia Berhad, commented: "This excellent performance reflects the success of the bank's strategy tocreate a broad base of income sources and a well-balanced loan portfolio with aneven split between corporate and consumer credit. "The local banking sector remains highly competitive with both conventional andIslamic banks expanding their networks aggressively. However, HSBC Bank MalaysiaBerhad is well-positioned in all growth areas, ranging from value-added consumerbanking, financing and investment products to innovative financial solutions forcorporates to capture new business opportunities. This is particularly the casein Islamic banking which has great growth potential. "Besides exploring growth opportunities, the bank has embarked on a number ofcustomer focused initiatives to reduce operational costs and improve customerservice delivery with the goal of becoming the most preferred bank in Malaysia." UNAUDITED CONDENSED BALANCE SHEET AS AT 31 MARCH 2007 Group BankFigures in MYR '000s 31Mar07 31Dec06 31Mar07 31Dec06 AssetsCash and short-term funds 5,208,215 6,114,345 5,208,215 6,114,345Securities purchased under resale agreements 2,893,018 2,273,539 2,893,018 2,273,539Deposits and placements with banks and other financial institutions 2,660,975 1,989,882 2,660,975 1,989,882Securities held-for-trading 1,456,506 795,937 1,456,506 795,937Securities available-for- sale 5,461,935 3,806,463 5,461,935 3,806,463Loans, advances and financing 24,042,636 24,343,937 24,042,636 24,343,937Other assets 701,535 578,089 701,535 578,089Statutory deposits with Central Bank Malaysia 705,148 698,648 705,148 698,648Investment in subsidiaries companies - - 21 21Property, plant and equipment 302,263 303,387 302,263 303,387Intangible assets 35,619 29,172 35,619 29,172Deferred tax assets 69,063 69,330 69,063 69,330Total assets 43,536,913 41,002,729 43,536,934 41,002,750 LiabilitiesDeposits from customers 33,933,980 31,822,208 33,934,001 31,822,229Deposits and placements of banks and other financial institutions 2,095,032 1,934,326 2,095,032 1,934,326Obligations on securities sold under repurchased agreements 1,812,175 1,660,739 1,812,175 1,660,739Bills and acceptances payable 461,060 490,055 461,060 490,055Other liabilities 1,503,649 1,351,441 1,503,649 1,351,441Recourse obligation on loans sold to Cagamas Berhad 890,443 899,751 890,443 899,751Provision for taxation 51,077 31,278 51,077 31,278Total liabilities 40,747,416 38,189,798 40,747,437 38,189,819 Shareholders' fundsShare capital 114,500 114,500 114,500 114,500Reserves 2,674,997 2,448,431 2,674,997 2,448,431Proposed dividend - 250,000 - 250,000Shareholders' funds 2,789,497 2,812,931 2,789,497 2,812,931 Total liabilities and shareholders' funds 43,536,913 41,002,729 43,536,934 41,002,750 Commitments and contingencies 65,047,866 60,087,067 65,047,866 60,087,067 Note: The financial statements of HSBC Bank Malaysia Berhad have been preparedin accordance with the applicable approved accounting standards issued by theMalaysian Accounting Standards Board. UNAUDITED CONDENSED INCOME STATEMENT FOR THE FIRST QUARTER ENDED 31 MARCH 2007 Group and Bank Figures in MYR '000s 31Mar07 31Mar06 Revenue 770,798 619,962 Interest income 483,304 393,829 Interest expense (209,614) (166,731) Net interest income 273,690 227,098 Other operating income 202,794 164,468 Income from Islamic banking operations 55,040 31,303 Operating income 531,524 422,869 Other operating expenses (215,689) (201,190) Profit before allowance 315,835 221,679 Allowance for losses on loans and financing (7,718) (13,727) Profit before taxation 308,117 207,952 Taxation (86,270) (65,696) Profit attributable to shareholers 221,847 142,256 Earnings per MYR0.50 ordinary share- basic/diluted 96.9 sen 62.1 sen Note: The financial statements of HSBC Bank Malaysia Berhad have been preparedin accordance with the applicable approved accounting standards issued by theMalaysian Accounting Standards Board. 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