16th Aug 2007 10:00
HSBC Holdings PLC16 August 2007 The following text is the English translation of a news release issued inGermany by HSBC Trinkaus & Burkhardt, a 78.6 per cent indirectly ownedsubsidiary of HSBC Holdings plc. HSBC TRINKAUS & BURKHARDT AG FIRST HALF 2007 RESULTS • Operating profit up 15.0 per cent to €119.9 million. • Profit after tax up 19.5 per cent to €84.5 million. • Net fees and commissions up 9.1 per cent to €165.0 million. HSBC Trinkaus & Burkhardt AG first half 2007 results showed strong growthcompared with the first half 2006. This was primarily attributable to good contributions from net interest income and net fees and commissions. Operating profit was up 15.0 per cent year-on-year to €119.9 million. Profit after tax increased by 19.5 per cent to €84.5 million. All business segments improved their contribution compared to the same periodlast year. Private banking earnings increased 21.7 per cent due to the expansionof the securities business. The corporate banking business benefited from highernet interest income due to growth in deposits as well as from increased IPO andcapital market activity in the corporate finance business. The institutionalclient business improved on its prior year results due to the successfulexpansion of asset management and fixed income products businesses. Proprietarytrading reported a substantial increase in revenues due to high market demandfor structured interest products, equities and equity derivatives. Net interest income increased by 23.1 per cent to €54.3 million compared withthe first half of 2006. This was driven by an increase in customer deposits,which funded higher loans and advances to banks and increased loans and advancesto customers. In addition, there was a slight improvement in customer margins ondeposits. Net fees and commissions increased 9.1 per cent to €165.0 million as a result ofhigher income in the securities business arising from increased volumes fromhigher market volatility in capital markets during the first half of the yeartogether with improved performance from the issuing and structuring business. Trading profit increased by 4.3 per cent to €65.2 million. This growth was inaddition to the strong growth experienced in the first half of 2006. Equitiesand equity/index derivatives remain the strongest earnings components arising from strong demand for retail products sold under our HSBC Trinkaus Investment Products brand (www.hsbc-tip.de). Demand was met by expanding the range offered and also by obtaining approval to list and sell these products in Switzerland. The net credit for loan impairment charges of €2.7 million was attributable tothe reversal of both individually and collectively assessed impairmentallowances. Credit risk provisioning remains cautious and characterised byconservative valuation standards. Administrative expenses increased 13.4 per cent compared with the first half2006. This was largely due to the increase in the number of employees, businessexpansion and higher performance-related remuneration. Other administrative expenses increased as a result of higher IT consultancy services. The cost efficiency ratio remained stable at 58.4 per cent as compared with 58.3per cent for the first half of 2006. The Management Board continues to be cautiously optimistic for 2007 and believesthere are further solid earnings opportunities in light of growth forecasts forthe global economy and sustained economic growth in Germany. Net interest incomeis likely to increase further for the full year 2007 compared with the prioryear provided margins remain stable and volumes increase. Continued strongcontribution from net fees and commissions and trading profit in the second halfof 2007 however remains highly dependent on conditions within the capital marketwhere performance trends achieved in the first half of the year could bedisrupted if recent credit market volatility continues. Nevertheless, theManagement Board continues to pursue the goal of increasing operating profit in2007. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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