HSBC Trinkaus H1 2008

RNS Number : 6627B

HSBC Holdings PLC

20 August 2008

 



20 August 2008

The following text is the English version of a news release issued in Germany by HSBC Trinkaus & Burkhardt AG, a 78.6 per cent indirectly owned subsidiary of HSBC Holdings plc.

Press Release

HSBC TRINKAUS REPORTS ROBUST EARNINGS 

IN THE FIRST HALF OF 2008  

• First-half operating profit of €101.4 million

• Net interest income grows to €63.3 million

• Net fee income of €178.6 million

HSBC Trinkaus produced a strong performance in the first half of 2008 and despite the continuing turmoil in the financial markets was able to strengthen its position in the German banking sector. 

Overall, operating profit declined by 15.3 per cent on the record performance achieved in the same period last year from €119.7 million to €101.4 million. Net profit after tax also fell, by 17.7 per cent to €69.5 million. However, operating profit and net profit after tax for the six months ended 30 June 2008 were consistent with the same period in 2006.

Financial commentary

Net interest income over the period grew by 16.6 per cent to €63.3 million from €54.3 million for the first half of 2007. Net loan impairment and other credit risk provisions totalled €0.7 million in the period compared to a net reversal of €2.7 million in the same period in 2007. This level of charge continues to demonstrate the Bank's cautious default risk assessment policy.  

Net fee income for the first half of 2008 increased 8.2 per cent to €178.6 million from €165.0 million in the same period in 2007. A significant contribution to this increase came from International Transaction Services GmbH (ITS), the securities settlement subsidiary acquired on 1 January 2008 and consolidated here for the first time.

Net trading income in the first six months of 2008 fell by 4.3 per cent to €62.4 million from €65.2 million in the same period in 2007. Equities and equity/index derivatives trading remains the strongest contributor to net trading income, growing by 3.9 per cent over the six month period to €48.5 million from €46.7 million in the first half of 2007. However, this was offset by a decline of 24.9 per cent in income from interest rate products and foreign exchange in the six month period to €13.9 million from €18.5 million in the same period last year. 

Administrative expenses grew by 15.4 per cent to €204.4 million. The increase in staff expenses was due to the consolidation of ITS and an increase in the number of employees from almost 2,000 in the first half of 2007 to more than 2,150 currently. At 66.7 per cent, the cost: income ratio of HSBC Trinkaus is still within the target range of 65 to 70 per cent.

Results by business segment

The balanced nature of the HSBC Trinkaus business model proved robust in the first half of 2008. The Corporate Banking and Institutional Clients segments reported increases in earnings despite the downturn in the financial markets. However, the challenges posed by unfavourable market conditions prevented the Private Banking and Global Markets businesses from repeating their robust prior-year results.

Corporate Banking recorded an increase in profits compared to the same period last year. This was due largely to higher net interest income as a result of an increase in sight deposits and lending volume as well as an increase in deposit margins. There was also an improvement in net fee income in the securities, international and foreign exchange businesses. The Institutional Client segment was again successful in the area of equities, fixed income and custody. 

Private Banking reported lower transaction revenues in the securities business as many investors continued to exercise considerable caution in the present environment. Increasing revenues in Asset Management were able to almost fully compensate for this decline. Global Markets was the business segment most affected by unfavourable market conditions and was therefore not able to repeat its prior-year result. There was also a decline in the Bank's structured interest and credit products business. 

Forecast

HSBC Trinkaus sees good earnings opportunities - derived from its balanced business model, conservative approach to credit risk and connections to the wider HSBC Group -  in the second half of 2008, although the market environment will continue to be extremely challenging.

HSBC Trinkaus' cooperation with the HSBC Group, with its presence in 85 countries and territories, enables the Bank to offer its clients local knowledge combined with global reach. This strategic advantage will continue to open up the opportunities for the Bank to expand market share within its clearly-defined target groups - high net worth private clients, corporate clients and institutional clients.

Media enquiries: to Steffen Pörner on + 49 211 910-1664 or at  [e-mail]

Notes for editors:

HSBC Trinkaus 

HSBC Trinkaus is one of the leading private banks in Germany and part of the globally-operating HSBC Group. In addition to the head office in Düsseldorf, HSBC Trinkaus is represented in six locations in Germany with over 2,150 employees and has access to the global network of the HSBC Group. With total assets of €20.6 billion* and €88.2 billion in funds under management and administration*, the Bank has a Fitch rating of AA. The core target groups are private clients, corporate clients and institutional clients.  

*(figures as at 30 June 2008)

Press releases can be found at: www.hsbctrinkaus.de in the section marked: 'About us'. 

 

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