16th Nov 2007 09:00
HSBC Holdings PLC16 November 2007 HSBC BANK MALAYSIA BERHAD RESULTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2007 - HIGHLIGHTS • Profit before taxation of MYR720 million up MYR14 million, or 1.9 per cent, for the nine months ended 30 September 2007 compared with MYR706 million for the same period in 2006. • Profit before allowance for losses on loans and financing of MYR946 million up MYR164 million, or 21.0 per cent, for the nine months ended 30 September 2007 compared with MYR782 million for the same period in 2006 mainly attributable to the following: - Revenue of MYR2.4 billion up MYR308 million, or 14.7 per cent, for the nine months ended 30 September 2007 compared with MYR2.1 billion for the same period in 2006. - Net interest income of MYR828 million up MYR105 million, or 14.6 per cent, for the nine months ended 30 September 2007 compared with MYR723 million for the same period in 2006. - Income from Islamic banking operations of MYR174 million up MYR51 million, or 41.1 per cent, for the nine months ended 30 September 2007 compared with MYR123 million for the same period in 2006. • Allowance for losses on loans and financing of MYR226 million up MYR151 million, or 201.3 per cent, for the nine months ended 30 September 2007 compared with MYR75 million for the same period in 2006. • Cost efficiency ratio for the nine months ended 30 September 2007 improved to 42.9 per cent from 45.7 per cent for the same period in 2006. • Total assets of MYR44.8 billion up MYR3.8 billion, or 9.2 per cent, at 30 September 2007 compared with MYR41.0 billion at 31 December 2006. HSBC Bank Malaysia Berhad - results for the nine months ended 30 September 2007 HSBC Bank Malaysia Berhad has reported solid growth in revenue of 14.7 per centand profit before allowance of 21.0 per cent for the nine months ended 30September 2007 compared with the corresponding period last year. This is mainlyattributable to growth in all major income streams, including net interestincome, trading income and income from Islamic banking operations. Growth inpre-tax profit for the nine months ended 30 September 2007 was a moderate 1.9per cent, or MYR13 million, compared with the same period in 2006 as a result ofhigher allowance for losses on loans and financing primarily due to higherimpairment allowances against corporate lending. Higher net interest income for the first nine months of 2007 was principallydriven by year-on-year growth in lending of MYR2.7 billion, or 11.0 per cent,while income from Islamic banking operations rose strongly, by 41.1 per centagainst the same period last year, due to growth in finance income from consumercredit and hire purchase financing. Other operating income for the nine months ended 30 September 2007 grew 10.1 percent compared with the corresponding period in 2006. This was mainly as a resultof higher foreign exchange profits due to volatility of the Malaysian ringgitand further liberalisation of the Central Bank's foreign exchange administrativerules which resulted in higher hedging activities by corporate customers. Other operating expenses for the first nine months of 2007 increased by 8.2 percent, or MYR53 million, against the same period last year mainly due to higherpersonnel costs and inter company expenses. The cost efficiency ratio for the nine months ended 30 September 2007 improvedto 42.9 per cent from 45.7 per cent for the same period in 2006. This was aresult of strong growth in all major income streams while other operatingexpenses grew at a slower pace. Profit before tax of MYR226 million for the three months ended 30 September 2007decreased by MYR67 million, or 22.9 per cent, compared with the correspondingperiod last year. This was primarily attributable to an exceptional profit ofMYR35 million gained from the disposal of a merchant acquiring credit cardbusiness in July 2006 to a joint venture between HSBC and Global Payments Inc,coupled with higher individual impairment allowances against consumer lending,as well as increased general impairment allowance due to the expanded loan base. Total assets at 30 September 2007 grew by MYR3.8 billion, or 9.2 per cent. Thiswas mainly attributable to increased corporate lending, up MYR2.7 billion, or10.1 per cent compared with 31 December 2006. Customer deposits of MYR35.9billion at 30 September 2007 increased by MYR4.1 billion, or 11.3 per cent,compared with 31 December 2006 as a result of the bank's continuous efforts toraise Premier and demand deposits. Irene Dorner, deputy chairman and CEO of HSBC Bank Malaysia Berhad, commented:"Amidst an increasingly competitive banking environment, HSBC Bank MalaysiaBerhad continues to show robust growth in all major income sources as well asbalance sheet size. The Bank will continue its broad-based growth strategy witha focus on higher potential areas such as Islamic financing and SMEs. "The Bank is well positioned to capitalise on business opportunities arisingfrom the progressive liberalisation of the local finance service sector. It willcontinue to strengthen and broaden customer relationships, improve product andservice quality, and provide value-added services to ensure HSBC Bank MalaysiaBerhad is the best place to bank for our customers. In 2006 and early 2007, theBank set up four new branches in Malaysia which further strengthened our branchnetwork to 40 and expanded our geographical reach to a wider customer base. "In view of the strong local economic fundamentals such as benign inflationarytrend, low unemployment and a strong current account balance, the Malaysianeconomy is expected to grow at 6 per cent in 2007 and further strengthen to6-6.5 per cent in 2008. The Bank is well positioned to explore and capture newbusiness opportunities in the potential growth areas by leveraging on our strongbrand, global network and expertise in the banking industry." UNAUDITED CONDENSED BALANCE SHEET AS AT 30 SEPTEMBER 2007 Group Bank Figures in MYR '000s 30Sep07 31Dec06 30Sep07 31Dec06 Assets Cash and short-term funds 5,736,739 6,114,345 5,736,739 6,114,345Securities purchased under resale agreements 2,033,782 2,273,539 2,033,782 2,273,539Deposits and placements with banks and other financial institutions 132,695 1,989,882 132,695 1,989,882Securities held-for-trading 1,532,424 795,937 1,532,424 795,937Securities available-for-sale 5,841,110 3,806,463 5,841,110 3,806,463Loans, advances and financing 27,073,900 24,343,937 27,073,900 24,343,937Other assets 1,013,133 578,089 1,013,133 578,089Statutory deposits with Central Bank Malaysia 986,447 698,648 986,447 698,648Investment in subsidiaries - - 21 21Prepaid land lease payments 21,129 21,493 21,129 21,493Property, plant and equipment 278,134 281,894 278,134 281,894Intangible assets 39,682 29,172 39,682 29,172Deferred tax assets 86,997 69,330 86,997 69,330Total assets 44,776,172 41,002,729 44,776,193 41,002,750 Liabilities Deposits from customers 35,895,479 31,822,208 35,895,500 31,822,229Deposits and placements of banks and other financial institutions 2,503,713 1,934,326 2,503,713 1,934,326Obligations on securities sold under repurchased agreements - 1,660,739 - 1,660,739Bills and acceptances payable 505,224 490,055 505,224 490,055Other liabilities 1,676,333 1,351,441 1,676,333 1,351,441Recourse obligation on loans sold to Cagamas Berhad 774,828 899,751 774,828 899,751Provision for taxation 44,272 31,278 44,272 31,278 Subordinated bonds 500,000 - 500,000 -Total liabilities 41,899,849 38,189,798 41,899,870 38,189,819 Shareholders' funds Share capital 114,500 114,500 114,500 114,500Reserves 2,761,823 2,448,431 2,761,823 2,448,431Proposed dividend - 250,000 - 250,000Shareholders' funds 2,876,323 2,812,931 2,876,323 2,812,931Total liabilities and shareholders' funds 44,776,172 41,002,729 44,776,193 41,002,750Commitments and contingencies 79,131,835 60,087,067 79,131,835 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 THIRD FINANCIAL QUARTER/PERIOD ENDED 30 SEPTEMBER 2007 Group and Bank 3rd quarter ended Year-to-date ended 30Sep07 30Sep06 30Sep07 30Sep06 MYR'000 MYR'000 MYR'000 MYR'000 Revenue 813,351 779,309 2,405,400 2,097,632 Interest income 504,056 465,174 1,486,275 1,285,463 Interest expense (227,716) (211,870) (657,989) (562,903) Net interest income 276,340 253,304 828,286 722,560 Other operating income 220,394 231,397 653,891 593,825 Income from Islamic banking operations 59,903 49,490 173,851 123,206 Operating income 556,637 534,191 1,656,028 1,439,591 Other operating expenses (249,533) (211,912) (710,214) (657,687) Profit before allowance 307,104 322,279 945,814 781,904 Allowance for losses on loans and financing (80,631) (29,219) (226,312) (75,761) Profit before taxation and 226,473 293,060 719,502 706,143 zakat Taxation and zakat (68,055) (78,498) (204,333) (202,806) Profit attributable to shareholders 158,418 214,562 515,619 503,337 Earnings per MYR0.50 ordinary share- basic/diluted 69.2 sen 93.7 sen 225.0 sen 219.8 sen Dividends per MYR0.50 ordinary share (net)- paid in respect of prior year - - 109.2 sen 65.5 sen- interim dividend paid 87.3 sen 65.5 sen 87.3 sen 65.5 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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