15th May 2006 14:00
HSBC Holdings PLC15 May 2006 The following text is the English translation of a news release issued in Germany by HSBC Holdings plc's 78.603 per cent-owned subsidiary. HSBC TRINKAUS & BURKHARDT FIRST QUARTER 2006 RESULTS • Profit after tax increased to EUR32.1 million in the first quarter of 2006 compared to EUR19.5 million in the first quarter of 2005, an increase of 64.6 per cent. • Operating profit increased to EUR52.2 million in the first quarter of 2006 compared to EUR26.8 million in the first quarter of 2005, an increase of 94.8 per cent. • Net fee income increased to EUR72.9 million in the first quarter of 2006, an increase of 18.7 per cent compared to the first quarter of 2005. HSBC Trinkaus & Burkhardt has had a strong start to 2006. Compared to the firstquarter of 2005, profit after tax increased by 64.6 per cent to EUR32.1 millionand operating profit increased by 94.8 per cent from EUR26.8 million to EUR52.2 million. All business segments experienced a positive market environment in the firstquarter of 2006. Trading performance in equities, equity- and index-derivativesand fixed-income and fixed income derivatives was particularly strong. Corporate and institutional clients also benefitted from close co-operationbetween HSBC Trinkaus & Burkhardt and the HSBC Group, particularly the broadproduct range which HSBC gives HSBC Trinkaus & Burkhardt access to. The PrivateBanking business experienced strong growth in assets under management. The most important element of the bank's success in the first quarter of 2006was that net fee income increased by 18.7 per cent to EUR72.9 million comparedto the same period in 2005. Significant revenue growth was also achieved inforeign exchange and derivatives. Higher revenue commissions in the securitiesbusiness and in asset management led to an increase in the bank's fee incomefrom securities. Net interest income remains strong at EUR16.8 million in thefirst quarter of 2006 compared to EUR16.5million in the first quarter of 2005.Interest income from financial investments decreased because of maturinghigh-yield bonds which were partially replaced by lower yielding securities.This was compensated for by higher deposit volumes, especially from ourinstitutional clients, which were mostly invested in the interbank market. Compared to the first quarter of 2005, trading profit has more than doubled inthe first quarter of 2006 from EUR16.4 million to EUR36.7 million. Thisencouraging trend was driven by the equity and equity-/index-certificatesbusiness, which once again delivered the highest contribution to result. Thisresult was also driven by the fixed-income and fixed-income-derivativesbusiness. The bank continued its conservative attitude toward the assessment of creditrisk on new exposures and this, combined with effective risk management ofexisting credit relationships, led to an encouraging performance in riskprovision for the credit business. Provisions dropped to EUR0.1 million duringthe first quarter of 2006 compared to EUR0.7 million in the same period of 2005. Due to higher performance-related remuneration, salaries and wages increasednotably in the first quarter of 2006, even when taking into account the partialdecline caused by the shift of staff to our subsidiary for securities services -International Transaction Services GmbH. This unit was founded in 2005. Otheradministrative expenses have increased, largely due to higher IT costs, as thebank pursued its successful growth strategy. On the other hand, depreciation hasdecreased due to the sale of the securities service platform GEOS to ITS.Overall, these effects led to a decrease in the bank's cost income ratio from68.9 per cent during the first quarter of 2005 to 57.5 per cent in the firstquarter of 2006. The managing partners remain optimistic about the bank's performance in 2006.Successful acquisition of new customers has broadened and steadied the revenuebase, a phenomenon which is most evident in the increase of net fee income inthe first quarter of 2006. However, net fee income and, especially, tradingprofits remain highly dependent on the continued strength of capital markets.Nevertheless, the managing partners continue to pursue the goal of increasingsignificantly the bank's operating profit during 2006. Duesseldorf, May 2006 This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
HSBC Holdings