HSBC Bank Malaysia Berhad Res

RNS Number : 4614C

HSBC Holdings PLC

13 November 2009

 



13 November 2009

HSBC BANK MALAYSIA BERHAD

RESULTS FOR THE NINE MONTHS ENDED

30 SEPTEMBER 2009

• Profit before tax for the nine months ended 30 September 2009 was MYR631 million, 28.3 per cent lower than the MYR879 million reported for the same period in 2008.

• Operating income decreased by MYR162 million, or 8.9 per cent, compared with the same period in 2008, mainly due to a decline in net interest income of MYR105 million, or 12.1 per cent, and other operating income of MYR69 million or 9.0 per cent.

• Allowance for losses on loans and financing was up MYR18 million, or 9.4 per cent, for the nine months ended 30 September 2009.

• Cost efficiency ratio for the nine months ended 30 September 2009 deteriorated to 48.9 per cent from 41.2 per cent for the corresponding period in 2008.

• Total assets of MYR52.0 billion fell slightly from RM52.8 billion at 31 December 2008.

• Core capital and total risk-weighted capital ratios (net of proposed dividends) of 10.2 per cent and 14.8 per cent at 30 September 2009 improved compared to 8.8 per cent and 13.0 per cent respectively at 31 December 2008.

Commentary

HSBC Bank Malaysia Berhad ('the Bank') posted profit before tax of MYR631 million in the first nine months of 2009, a fall of 28.3 per cent on the same period in 2008 as the effects from the global economic downturn became more apparent in 2009.

A 12.1 per cent, or MYR105 million, decline in net interest income for the nine months ended 30 September 2009 to MYR758 million (nine months ended 30 September 2008: MYR863 million) was principally driven by a reduction in balances as gross customer loans and advances declined by MYR1.7 billion, or 5.6 per cent, from 30 September 2008 to 30 September 2009, coupled with reduced interest margins as the Central Bank of Malaysia progressively lowered the Overnight Policy Rate ('OPR') by 150 basis points from November 2008. The reduction in lending rates was greater than the reduction in floor deposit rates, which are determined by the Central Bank.

Other operating income for the nine months ended 30 September 2009 decreased to MYR695 million, down 9.0 per cent or MYR69 million compared to the corresponding period in 2008. This was mainly a result of a decrease of MYR48 million in trading profits, reflecting lower transaction volumes in the foreign exchange market and a decline of MYR34 million in gains from sales of available-for -sale securities, moderated by higher fees and commissions of MYR8 million, primarily due to a rise in commissions on cards' services.

Income from Islamic Banking operations for the first nine months of 2009 increased by MYR11 million to MYR199 million compared to the corresponding period in 2008, mainly on the growth in fixed rate Islamic personal instalment loans which were relatively unaffected by the reduction in the OPR.

Other operating expenses for the nine months ended 30 September 2009 increased by 7.9 per cent, or MYR59 million, to MYR807 million compared with the same period in 2008. This was mainly due to higher employee costs (up MYR31 million or 7.8 per cent) as provision was made for redundancy costs for employees affected by the transfer of the Bank's call centre activities to a Global Shared Service Centre.

Primarily as a result of the decline in operating income, coupled with the increase in other operating expenses, the cost efficiency ratio for the first nine months of 2009 deteriorated to 48.9 per cent from 41.2 per cent in the same period last year.

Allowance for losses on loans and financing for the nine months ended 30 September 2009 increased by MYR18 million or 9.4 per cent compared to the same period in 2008, reflecting increased provisions against loans to corporate customers impacted by the slowdown in the economy in the current year.

Total assets at 30 September 2009 fell by MYR0.8 billion, or 1.5 per cent, compared to 31 December 2008. Net loans, advances and financing, at MYR28.0 billion, saw a decrease of MYR1.7 billion, or 5.9 per cent, mainly due to lower trade financing activities. However, customer deposits of MYR42.5 billion increased by MYR1.5 billion compared to 31 December 2008 (MYR41.0 billion).

Ms Irene M Dorner, Deputy Chairman and Chief Executive Officer of HSBC Bank Malaysia Berhad, commented: "Notwithstanding the weaker results, the Malaysian economy is now showing signs of recovery. Given where the economy is, these are satisfactory results for HSBC Bank Malaysia. The implementation of economic stimulus packages by the Government has helped to create increased economic activity and, in part, has restored some investor confidence. Things are beginning to look up in the real economy as we look forward into the fourth quarter of 2009 and into 2010 and although recovery is still slow we expect to see further improvement over this period."

Media enquiries to Elizabeth Wee on [phone] or at [e-mail]

Unaudited Condensed Balance Sheets at 30 September 2009

		Group								Bank
Figures in MYR '000s		30 Sep 2009				31 Dec 2008				30 Sep 2009				31 Dec 2008
Assets
Cash and short-term funds		9,252,410				8,428,554				8,240,757				7,445,455
Securities purchased under resale agreements		6,384,308				3,778,793				6,384,308				3,778,793
Deposits and placements with banks and other financial institutions		603,454				997,814				1,546,752				1,941,125
Securities held-for-trading		1,454,352				3,491,259				1,342,026				3,223,521
Securities available-for-sale		4,524,128				3,914,911				4,155,595				3,349,350
Loans, advances and financing		27,974,086				29,719,270				25,213,254				26,792,239
Other assets		1,260,818				1,417,121				1,239,783				1,424,328
Statutory deposits with Central Bank		179,827				653,026				154,898				580,497
Investment in subsidiaries		-				-				660,021				660,021
Prepaid land lease payments		19,212				19,551				19,212				19,551
Property and equipment		254,942				258,092				249,924				255,609
Intangible assets		56,161				51,153				53,990				49,789
Deferred tax assets		83,385				86,769				69,520				71,566
Total assets		52,047,083				52,816,313				49,330,040				49,591,844
Liabilities
Deposits from customers		42,465,471				40,953,472				39,788,127				37,709,152
Deposits and placements of banks and other financial institutions		2,145,773				3,531,472				2,145,773				3,531,472
Bills and acceptances payable		287,807				414,233				281,939				413,180
Other liabilities		1,846,322				2,569,719				1,875,064				2,614,505
Recourse obligation on loans sold to National Mortgage Corporation		586,738				701,370				586,738				701,370
Provision for taxation		18,186				41,160				16,100				41,090
Subordinated bonds		1,004,525				1,027,338				1,004,525				1,027,338
Total liabilities		48,354,822				49,238,764				45,698,266				46,038,107
Shareholders' funds
Share capital		114,500				114,500				114,500				114,500
Reserves		3,577,761				3,313,049				3,517,274				3,289,237
Proposed dividend		-				150,000				-				150,000
Shareholders' funds		3,692,261				3,577,549				3,631,774				3,553,737
Total liabilities and shareholders' funds		52,047,083				52,816,313				49,330,040				49,591,844
Commitments and contingencies		76,351,069				85,309,889				74,910,158				83,633,914

 Note: The financial statements of HSBC Bank Malaysia Berhad have been prepared in accordance with the applicable approved accounting standards issued by the Malaysian Accounting Standards Board. On 24 August 2008, the Islamic Banking operations which were previously included in the Bank's operations were transferred to a wholly owned subsidiary, HSBC Amanah Malaysia Berhad.

Unaudited Condensed Income Statement
for the Financial Quarter/Period Ended 30 September 2009
			Group
			3rd quarter ended						Year-to-date ended
Figures in MYR'000s			30 Sep 2009			30 Sep 2008			30 Sep 2009				30 Sep 2008
Revenue			736,605			880,767			2,262,379				2,658,365
Interest income			421,201			558,233			1,329,095				1,610,165
Interest expense			(175,070)			(265,565)			(570,754)				(747,180)
Net interest income			246,131			292,668			758,341				862,985
Other operating income			239,945			216,847			694,593				763,162
Income from Islamic Banking			64,842			67,096			199,009				187,688
Operating income			550,918			576,611			1,651,943				1,813,835
Other operating expenses			(292,575)			(265,281)			(807,406)				(747,957)
Profit before allowance			258,343			311,330			844,537				1,065,878
Allowance for losses on loans and financing			(69,492)			(78,014)			(204,255)				(186,726)
Impairment losses on available for sale securities			-			-			(9,637)				-
Profit before taxation			188,851			233,316			630,645				879,152
Taxation			(49,506)			(62,612)			(161,412)				(227,045)
Profit attributable to shareholders			139,345			170,704			469,233				652,107
Earnings per RM0.50 ordinary share
- basic/diluted			60.8 sen			74.5 sen			204.9 sen				284.7 sen
Dividends per RM0.50 ordinary share (net)
- paid in respect of prior year			-			-			65.5 sen				109.2 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 prepared in accordance with the applicable approved accounting standards issued by the Malaysian Accounting Standards Board. On 24 August 2008, the Islamic Banking operations which were previously included in the Bank's operations were transferred to a wholly owned subsidiary, HSBC Amanah Malaysia Berhad.

Unaudited Condensed Income Statement for the Financial Quarter/Period Ended 30 September 2009 Bank 3rd quarter ended Year-to-date ended Figures in MYR'000s 30 Sep 2009 30 Sep 2008 30 Sep 2009 30 Sep 2008 Revenue 686,743  846,267  2,100,390  2,623,865  Interest income 427,106  561,710  1,346,858  1,613,642  Interest expense (175,070) (265,565) (570,754) (747,180) Net interest income 252,036   296,145  776,104  866,462  Other operating income 259,637  223,103  753,532  769,418  Income from Islamic Banking -  37,407  -  157,999  Operating income 511,673  556,655  1,529,636  1,793,879  Other operating expenses (282,491) (261,100) (773,210) (743,776) Profit before allowance 229,182  295,555  756,426  1,050,103  Allowance for losses on loans and financing (58,231) (75,455) (166,459) (184,167) Impairment losses on available-for-sale securities -  -  (9,637) -  Profit before taxation 170,951  220,100  580,330  865,936  Taxation (44,580) (58,968) (147,715) (223,401) Profit attributable to shareholders 126,371  161,132  432,615  642,535  Earnings per RM0.50 ordinary share - basic/diluted 55.2 sen  70.4 sen  188.9 sen  280.6 sen  Dividends per RM0.50 ordinary share (net) - paid in respect of prior year -  -  65.5 sen  109.2 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 prepared in accordance with the applicable approved accounting standards issued by the Malaysian Accounting Standards Board. On 24 August 2008, the Islamic Banking operations which were previously included in the Bank's operations were transferred to a wholly owned subsidiary, HSBC Amanah Malaysia Berhad.

 

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