15th May 2007 10:00
HSBC Holdings PLC15 May 2007 HSBC TRINKAUS & BURKHARDT FIRST QUARTER 2007 RESULTS • Profit after tax up 29.3 per cent to €41.5 million.• Net interest income up 33.1 per cent to €20.5 million.• Net fees and commissions up 22.4 per cent to €89.2 million.• Cost:income ratio improved to 57.2 per cent. HSBC Trinkaus & Burkhardt first quarter 2007 results were up strongly comparedto the first quarter of 2006. Operating profit increased 17.8 per cent, from€52.2 million to €61.5 million compared to the first three months of last year.Profit after tax was up 29.3 per cent from €32.1 million to €41.5 millioncompared to the first quarter of 2006. All business segments increased their earnings contributions significantlyyear-on-year. The institutional client business made the largest earnings contribution, driven by performance in the fixed income and asset management products businesses. The private banking business increased its earnings contribution significantly due to the net inflow of customer assets under management and the associated expansion of the securities business. The corporate banking business benefited from strong growth in the deposits businessas well as from improving M&A and IPO business activity. The trading segment sawperformance improve in money market and foreign exchange trading and also in theequities and equity derivatives business. Net interest income was up 33.1 per cent from €15.4 million to €20.5 millioncompared to first quarter 2006, driven by growth in both deposit volumes andloans and advances to customers. Net provisioning recoveries of €0.4 million were primarily due to a reduction inloan impairment charges, as historical default rates in the lending business declined further. The bank continues to be cautious in the assessment of new loancommitments, and is focused on effective risk management with respect toexisting lending relationships, against the backdrop of a favourable creditenvironment. The bank recorded a strong increase in net fees and commissions, the bank's mostimportant profit contributor, up 22.4 per cent from €72.9 million in the firstquarter of 2006 to €89.2 million. Net fees and commissions from the securitiesbusiness provided the highest contribution driven by higher income from customertransactions. The contribution from the issuing and structuring business increased significantly due mainly to the successful placement of a structured participatory rights issue on behalf of H.E.A.T Mezzanine 2007. Trading profit increased 2.2 per cent in the first three months of 2007 from€36.7 million to €37.5 million compared to the first quarter 2006. The equitiesand equity/index derivatives business remains the largest earnings component andcontinued to make a substantial earnings contribution with the issue of retailproducts under the HSBC Trinkaus Investment Products brand (www.hsbc-tip.de).The interest-related trading segments reported a slight increase in profitswhile the contribution from foreign currency trading was more than double theprior year comparable quarter result. Administrative expenses were up 18.6 per cent to €88.6 million compared with thefirst quarter 2006, primarily due to the increase in both the number of employees and higher performance-related remuneration. The rise in other administrative expenses is the result, among other things, of higher fees for consultancy services in the IT segment. The cost:income ratio improved to 57.2 per cent compared with 57.5 per cent inthe first quarter the previous year, well below the upper limit of the 65 to 70 per cent target set by the bank. The Management Board is optimistic for 2007 as the further development of ourcustomer businesses is steadily broadening the revenue base. The strongcontribution from net fees and commissions remains highly dependent on capitalmarkets performance. In addition, the base level for the current financial yearis very high as a result of the successes in recent years in which double-digitgrowth rates in the operating result were generated. Nevertheless, theManagement Board is pursuing the goal of increasing operating profit in 2007. This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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