HSBC Bank Canada second quarter 2009 results*
VANCOUVER, July 24 /CNW/ -
- Net income attributable to common shares was C$114 million for the
quarter ended 30 June 2009, a decrease of 27.8 per cent over the same
period in 2008.(xx)
- Net income attributable to common shares was C$199 million for the
half-year ended 30 June 2009, a decrease of 41.1 per cent over the
same period in 2008.(xx)
- Return on average common equity was 13.3 per cent for the quarter
ended 30 June 2009 and 11.6 per cent for the half-year ended 30 June
2009 compared with 18.6 per cent and 20.0 per cent respectively for
the same periods in 2008.(xx)
- The cost efficiency ratio was 48.9 per cent for the quarter ended
30 June 2009 and 49.0 per cent for the half-year ended 30 June 2009
compared with 49.6 per cent and 48.1 per cent respectively for the
same periods in 2008.(xx)
- Total assets were C$70.5 billion at 30 June 2009 compared with
C$72.5 billion at 30 June 2008.
- Total funds under management were C$24.5 billion at 30 June 2009
compared with C$27.1 billion at 30 June 2008.
- Tier 1 capital ratio of 11.1 per cent and a total capital ratio of
13.7 per cent at 30 June 2009 compared to 9.3 per cent and
11.5 per cent respectively at 30 June 2008.(xxx)
(*) Results are prepared in accordance with Canadian generally accepted
accounting principles.
(xx) Restated to reflect accounting for the acquisition of HSBC
Financial Corporation Limited ("HSBC Financial") on 30 November
2008. Results for the quarter and half-year ended 30 June 2008 have
been restated to combine the previously reported results of the
bank with those of HSBC Financial to reflect the continuity of
interests method of accounting, as detailed in note 2 to the
consolidated financial statements in the 2008 Annual Report.
References in this news release to "banking operations" relate to
those excluding HSBC Financial and "consumer finance" refers to the
businesses of HSBC Financial.
(xxx) Calculated using guidelines issued by the Office of the
Superintendent of Financial Institutions in accordance with Basel
II capital adequacy framework. Tier 1 and total capital ratios at
30 June 2008 have not been restated to include HSBC Financial.
HSBC Bank Canada Financial Commentary
-------------------------------------------------------------------------
Overview
HSBC Bank Canada recorded net income attributable to common shares for
the three months ended 30 June 2009 of C$114 million, a decrease of C$44
million, or 27.8 per cent compared to C$158 million in the same quarter in
2008. Compared to the C$85 million achieved in the first quarter of 2009,
however, net income attributable to common shares for the three months ended
30 June 2009 increased by C$29 million, or 34.1 per cent. This includes the
results of the Consumer Finance business which incurred a net loss
attributable to common shares of C$17 million in the second quarter of 2009
compared to net income attributable to common shares of C$16 million for the
same quarter of 2008 and a net loss attributable to common shares of C$16
million in the first quarter of the current year.
Commenting on the results, Lindsay Gordon, President and Chief Executive
Officer of HSBC Bank Canada, said:
"HSBC Bank Canada achieved an increase in revenues and net income in the
second quarter of 2009, compared to the first quarter. The net interest margin
improved thanks to a more stable interest rate environment. This, together
with encouraging increases in debt and equity capital markets activity, and
lower loan loss provisions, contributed to an overall improvement in our
results between the first and second quarters. However, the results for the
year to date clearly reflect the ongoing recession both in Canada and around
the world, which has significantly reduced net interest margins, and
significantly increased provisions for credit losses, compared to 2008.
"Although the economic outlook for the rest of 2009 remains uncertain, we
remain committed to supporting our core customer relationships and stay
focussed on managing costs. Our capital ratios were enhanced by a successful
preferred share offering at the beginning of the second quarter and we intend
to maintain our traditional financial strength, with appropriate focus on risk
management."
Net interest income
Net interest income for the second quarter of 2009 was C$368 million,
compared with C$423 million for the same quarter in 2008, a decrease of C$55
million, or 13.0 per cent. Average interest earning assets decreased 3.3 per
cent from C$63.7 billion to C$61.6 billion. In addition, there was a decrease
in net interest margin to 2.40 per cent in the quarter compared with 2.67 per
cent in the same quarter of 2008.
Net interest income from banking operations, which consists of Personal
Financial Services, Commercial Banking and Global Banking and Markets,
decreased by C$29 million and net interest margin decreased to 1.85 per cent
in the second quarter from 2.03 per cent in the same period last year, while
average interest earning assets decreased from C$58.5 billion to C$57.8
billion. Multiple reductions in prime interest rates during 2008 and 2009
resulted in reduced interest income on our floating rate loans, which was not
offset by an equal reduction in interest expense as our deposits re-priced
downwards more slowly. Also impacting net interest margin was the reduction in
the value of interest free funds and low interest deposits in a falling
interest rate environment as well as the lower rates earned on government and
other securities. Wider credit spreads experienced across the banking industry
also adversely impacted the relative cost of wholesale funding compared with
the same period in the prior year. The reduction in average interest earning
assets reflected the sale of the automobile loan portfolio in July 2008.
Net interest income for the Consumer Finance business decreased by C$26
million or 20.5 per cent compared to the same quarter in 2008 mainly as a
result of a reduction in average receivables of C$1.1 billion or 23.7 per
cent, including consumer finance, automobile and other loans.
Net interest income for the three months ended 30 June 2009 was C$368
million, C$18 million or 5.1 per cent higher compared with the first quarter
of 2009. Net interest margin increased to 2.40 per cent from 2.27 per cent
recorded in the earlier quarter. Interest rate actions undertaken by central
banks in prior periods had been largely concluded by the beginning of the
second quarter, and there was a greater benefit from the impact of re-pricing
of personal and wholesale deposits from earlier rate reductions. Spreads on
commercial loans improved during the quarter due to re-pricing initiatives
undertaken with customers to reflect the current credit environment.
On a year-to-date basis, net interest income was C$718 million in 2009,
compared with C$848 million in the same period last year, a decrease of C$130
million, or 15.3 per cent. This was a result of lower average interest earning
assets of C$62.0 billion compared to C$63.3 billion, together with the impact
of a reduction of net interest margin to 2.33 per cent from 2.69 per cent.
Non-interest revenue
Non-interest revenue was C$251 million in the second quarter of 2009,
compared with C$204 million for the same quarter in 2008, an increase of C$47
million, or 23.0 per cent. Overall trading revenue was C$48 million higher in
the second quarter of 2009, of which C$13 million was associated with the
bank's core trading activities. The remaining increase of C$35 million arose
from various mark-to-market gains and losses driven by the volatility in
market interest rates and tightening credit spreads. This included gains of
C$38 million arising on derivatives used to hedge certain of our interest rate
exposures where hedge accounting was not applied and translation gains of C$47
million on US$ denominated funding where the corresponding translation loss on
US$ denominated available-for-sale ("AFS") securities was charged to
shareholders' equity through accumulated other comprehensive income. It also
included a valuation gain of C$11 million on non-bank Asset Backed Commercial
Paper ("ABCP"), partially offset by losses of C$66 million on certain of our
own debt obligations designated at fair value. Revenues from customer banking
activities, including deposit and payment service charges, trade finance and
credit fees, were C$8 million higher in total than the same quarter in 2008
reflecting the underlying strength and robustness of our core banking
business. Capital market fees were C$7 million higher due to increased
underwriting activity in 2009 and an increase in equity and debt markets which
resulted in increased commissions earned on client trading activities. Gains
on AFS securities of C$27 million were realized as certain securities were
sold, partially offset by an other-than-temporary impairment of C$6 million
recorded on certain AFS mortgage backed securities. Investment administration
fees were C$7 million lower reflecting the lower market values of customer
portfolios compared to the prior year. Securitization income was reduced by
C$19 million due to lower securitization funding requirements with
correspondingly lower realized gains on transactions.
Non-interest revenue for the three months ended 30 June 2009 was C$251
million, C$8 million or 3.3 per cent higher than the first quarter of 2009.
Gains on AFS securities were C$22 million higher than the first quarter of
2009, capital market fees were C$8 million better and credit fees were C$5
million higher. These were partially offset by a reduction of securitization
income of C$31 million and trading revenue that was C$14 million lower.
Trading revenue was impacted by an increase in core trading activities (C$2
million), offset by decreases in mark-to-market gains on hedging derivatives
(C$18 million) and increased losses on the fair value of our own debt
obligations (C$64 million), partially offset by higher translation gains on
US$ funding of US$ AFS securities (C$59 million). Other revenue was C$18
million higher due to the effect of a provision of C$20 million in respect of
a loss contingency recorded in the prior quarter.
On a year-to-date basis, non-interest revenue was C$494 million in 2009,
compared with C$443 million in the same period last year, an increase of C$51
million, or 11.5 per cent. The most significant positive variances included an
increase in trading revenue of C$70 million (of which C$16 million was
attributable to core trading activities, C$90 million to mark-to-market gains
on hedging derivatives, C$38 million to translation gains on US$ funding of
US$ AFS securities, and C$17 million to mark-to-market gains on non-bank ABCP,
partially offset by losses of C$92 million on the fair value of our own debt
obligations), gains on AFS of C$20 million, and capital market and credit fees
of C$22 million, partially offset by lower investment administration fees of
C$14 million and lower securitization income of C$11 million. In addition,
other income was lower, partially as a result of a reduction in the number of
closed Canadian Immigrant Investor Program ("Canadian IIP") transactions and
the loss contingency provision of C$20 million noted above.
Non-interest expenses
Non-interest expenses were C$303 million in the second quarter of 2009,
compared with C$311 million for the same period in 2008, a decrease of C$8
million, or 2.6 per cent. Salaries and employee benefits were C$4 million
lower, reflecting a lower number of staff, particularly in the Consumer
Finance business as a result of reductions in its branch network offset by
higher costs incurred to reduce staffing levels by the bank and the Consumer
Finance business. Premises and equipment costs increased by C$4 million, in
part as a result of increased amortization costs arising from investments in
new equipment and technology. Other non-interest expenses were C$8 million
lower due to reductions in a number of expense categories compared to the
prior year, mainly due to lower levels of commodity tax provisions,
transaction related costs and information technology expenses offset by higher
marketing expenses. The cost efficiency ratio for the second quarter of 2009
decreased to 48.9 per cent from 49.6 per cent in the same period in 2008.
Non-interest expenses for the three months ended 30 June 2009 were C$303
million, C$12 million or 4.1 per cent higher compared with the first quarter
of 2009. Salaries and employee benefits were C$5 million higher mainly as a
result of costs incurred to reduce staffing levels both in the bank as well as
the Consumer Finance business. In addition, increased capital market revenues
in the second quarter of 2009 resulted in higher variable compensation. There
was also a planned increase in marketing expenses of C$3 million.
On a year-to-date basis, non-interest expenses were C$594 million in
2009, compared with C$621 million in the same period last year, a decrease of
C$27 million, or 4.3 per cent. Salaries and employee benefits were C$15
million lower, reflecting a lower number of staff, particularly in the
Consumer Finance business as a result of reductions in its branch network
offset by higher costs incurred to reduce staffing levels. Premises and
equipment costs increased by C$7 million, in part as a result of increased
amortization costs. Other non-interest expenses were C$19 million lower due to
reductions in information technology expenses, lower commodity tax provisions,
certain transaction related costs and the impact of cost control initiatives
including corporate travel. The cost efficiency ratio for the first half of
2009 increased marginally to 49.0 per cent from 48.1 per cent in the same
period in 2008.
Credit quality and provision for credit losses
The provision for credit losses was C$126 million for the second quarter
of 2009, compared with C$82 million in the second quarter of 2008 and C$161
million in the first quarter of 2009. On a year-to-date basis, the provision
for credit losses was C$287 million in 2009, compared with C$157 million for
the same period in 2008. Provisions included C$59 million for the quarter and
C$143 million year-to-date for banking operations. Provisions for the Consumer
Finance business included C$67 million for the quarter and C$144 million
year-to-date, compared with C$57 million and C$107 million for the respective
periods in 2008. Increases have mainly been driven by deteriorating credit
conditions in the commercial business sector and in the Consumer Finance
business caused by economic conditions including higher unemployment.
Gross impaired credit exposures were C$1,088 million at 30 June 2009,
compared with C$932 million at 31 December 2008, and C$450 million at 30 June
2008. Total impaired exposures, net of specific allowances for credit losses,
were C$850 million at 30 June 2009, compared with C$770 million at 31 December
2008 and C$354 million at 30 June 2008.
The general allowance for credit losses was C$480 million at 30 June
2009, an increase of C$27 million from 31 December 2008 and an increase of
C$32 million from 30 June 2008, mainly due to higher provisions in the
Consumer Finance business resulting from worsening economic conditions. The
total allowance for credit losses, as a percentage of loans and acceptances
outstanding, was 1.54 per cent at 30 June 2009, compared with 1.24 per cent at
31 December 2008 and 1.06 per cent at 30 June 2008.
Income taxes
The effective tax rate in the second quarter of 2009 was 29.5 per cent,
compared to 28.2 per cent in the same quarter of 2008 and 28.9 per cent in the
first quarter of 2009. The effective tax rate for the year-to-date 2009 was
29.3 per cent, compared with 30.6 per cent for the same period in 2008.
Balance sheet
Total assets at 30 June 2009 were C$70.5 billion, a decrease of C$1.5
billion from 31 December 2008 and C$2.0 billion from 30 June 2008, as a result
of lower commercial credit demand and an extremely competitive environment for
both personal and commercial deposits. Commercial loans and acceptances
decreased from the end of 2008 by C$2.3 billion to C$26.0 billion. Although
residential mortgages decreased in the first quarter of 2009, recent activity
in housing markets resulted in higher mortgage originations in the second
quarter. Overall, mortgage loans decreased by less than 0.3 per cent compared
with 31 December 2008, although after securitizations the overall decrease was
C$0.3 billion or 2.4 per cent. Consumer loans and personal lines of credit in
the Personal Financial Services business were up by C$0.3 billion, net of
C$1.5 billion of auto loans sold in the third quarter of 2008, to C$5.6
billion while receivables of the Consumer Finance business decreased by C$0.5
billion due to the auto loan sale in the third quarter of 2008. Liquidity
remained strong at 30 June 2009, with more than C$19.3 billion of securities
and reverse repurchase agreements compared to C$17.5 billion at 31 December
2008 and C$15.3 billion at 30 June 2008.
Total deposits decreased by C$2.4 billion to C$49.6 billion at 30 June
2009 from C$52.0 billion at 31 December 2008 and C$51.3 billion at 30 June
2008. Personal deposits grew by C$1.0 billion over 31 December 2008 mainly
driven by growth in the number of High Rate and Direct Savings accounts, while
higher cost wholesale deposits, included in business and government deposits,
decreased by C$2.9 billion as a result of lower client borrowings and funding
from securitizations of C$1.7 billion.
Total assets under administration
An increase in equity markets as well as new product sales during the
second quarter resulted in an increase in funds under management to C$24.5
billion at 30 June 2009 from C$21.3 billion at 31 December 2008. However,
declines in equity markets during 2008 caused a decrease in funds under
management from the C$27.1 billion at 30 June 2008. Including custody and
administration balances, total assets under administration were C$33.9
billion, compared with C$30.5 billion at 31 December 2008 and C$37.8 billion
at 30 June 2008.
Capital management and regulatory capital ratios
The tier 1 and total capital adequacy ratios calculated in accordance
with the Basel II framework were 11.1 per cent and 13.7 per cent respectively
at 30 June 2009, up from 31 December 2008 and up compared to the ratios of 9.3
per cent and 11.5 per cent respectively at 30 June 2008, which were not
restated to reflect the acquisition of HSBC Financial.
Dividends
During the second quarter of 2009, the bank declared and paid C$70
million in dividends on HSBC Bank Canada common shares.
Regular quarterly dividends of 31.875 cents per share have been declared
on HSBC Bank Canada Class 1 Preferred Shares - Series C and 31.25 cents per
share on Class 1 Preferred Shares - Series D and 41.25 cents per share on
Class 1 Preferred Shares - Series E. Dividends will be payable on 30 September
2009, for shareholders of record on 15 September 2009.
Accounting policies adopted in 2009
Certain new accounting standards have become effective for 2009. This has
resulted in a reclassification for the current and previous periods of the net
carrying value of certain computer software costs from computer equipment
included in land, buildings and equipment to intangible assets included in
other assets although this has not resulted in any changes to the bank's total
assets. In addition, corresponding amortization has been reclassified for the
current and previous periods from premises and equipment expenses to other
non-interest expense although there is no change in reported net income.
Reference should be made to note 2 to the consolidated financial statements
included in the first quarter 2009 report to shareholders.
Certain prior period amounts have been reclassified to conform to the
current year's presentation. In addition, comparatives for the quarter and
half-year ended 30 June 2008 have been restated to reflect the acquisition of
HSBC Financial Corporation Limited accounted for using the continuity of
interests method. Reference should be made to the Bank's 2008 Consolidated
Financial Statements included in the 2008 Annual Report and Accounts for more
detailed information on the acquisition.
About HSBC Bank Canada
HSBC Bank Canada, a subsidiary of HSBC Holdings plc, has more than 260
offices including over 140 bank branches. With around 9,500 offices in 86
countries and territories and assets of US$2,527 billion at 31 December 2008,
the HSBC Group is one of the world's largest banking and financial services
organisations. Visit the bank's website at hsbc.ca for more information about
HSBC Bank Canada and its products and services.
Copies of HSBC Bank Canada's second quarter 2009 report will be sent to
shareholders in August 2009.
Caution regarding forward-looking financial statements
This document may contain forward-looking statements, including
statements regarding the business and anticipated financial performance of
HSBC Bank Canada. These statements are subject to a number of risks and
uncertainties that may cause actual results to differ materially from those
contemplated by the forward-looking statements. Some of the factors that could
cause such differences include legislative or regulatory developments,
technological change, global capital market activity, changes in government
monetary and economic policies, changes in prevailing interest rates,
inflation level and general economic conditions in geographic areas where HSBC
Bank Canada operates. Canada is an extremely competitive banking environment
and pressures on interest rates and the bank's net interest margin may arise
from actions taken by individual banks acting alone. Varying economic
conditions may also affect equity and foreign exchange markets, which could
also have an impact on the bank's revenues. In addition, there may be a number
of factors relating to the valuation of non-bank ABCP. The factors disclosed
above may not be complete and there could be other uncertainties and potential
risk factors not considered here which may impact the bank's results and
financial condition.
HSBC Bank Canada Summary
-------------------------------------------------------------------------
Quarter ended Half-year ended
Figures in C$ millions ----------------------------- -------------------
(except per share 30 June 31 March 30 June(1) 30 June 30 June(1)
amounts) 2009 2009 2008 2009 2008
--------- --------- --------- --------- ---------
Earnings
Net income attributable
to common shares $ 114 $ 85 $ 158 $ 199 $ 338
Basic earnings per
share (C$) 0.23 0.17 0.30 0.40 0.64
Performance ratios (%)
Return on average
common equity 13.3 10.0 18.6 11.6 20.0
Return on average assets 0.64 0.48 0.86 0.56 0.93
Net interest margin(*) 2.40 2.27 2.67 2.33 2.69
Cost efficiency ratio(xx) 48.9 49.1 49.6 49.0 48.1
Non-interest revenue:
total revenue ratio 40.5 41.0 32.5 40.8 34.3
Credit information
Gross impaired credit
exposures $ 1,088 $ 1,157 $ 450
Allowance for credit
losses
- Balance at end of
period 718 709 544
- As a percentage of
gross impaired
credit exposures 66% 61% 121%
- As a percentage of
gross loans and
acceptances 1.54% 1.46% 1.06%
Average balances
Assets $ 71,273 $ 72,346 $ 73,624 $ 71,808 $ 73,349
Loans 41,032 42,790 44,696 41,908 44,246
Deposits 50,182 51,805 51,831 50,624 51,402
Common equity 3,441 3,461 3,420 3,451 3,398
Capital ratios (%)(xxx)
Tier 1 11.1 10.2 9.3
Total capital 13.7 12.6 11.5
Total assets under
administration
Funds under management $ 24,469 $ 21,503 $ 27,118
Custody accounts 9,451 9,260 10,699
--------- --------- ---------
Total assets under
administration $ 33,920 $ 30,763 $ 37,817
--------- --------- ---------
(*) Net interest margin is net interest income divided by average
interest earning assets for the period.
(xx) The cost efficiency ratio is defined as non-interest expenses
divided by total revenue.
(xxx) Calculated using guidelines issued by the Office of the
Superintendent of Financial Institution Canada in accordance with
Basel II capital adequacy framework. 30 June 2008 ratios have not
been restated to include HSBC Financial Corporation Limited.
(1) Restated to reflect the acquisition of HSBC Financial Corporation
Limited.
HSBC Bank Canada Consolidated Statement of Income (Unaudited)
-------------------------------------------------------------------------
Quarter ended Half-year ended
Figures in C$ millions ----------------------------- -------------------
(except per share 30 June 31 March 30 June(1) 30 June 30 June(1)
amounts) 2009 2009 2008 2009 2008
--------- --------- --------- --------- ---------
Interest income:
Loans $ 496 $ 551 $ 776 $ 1,047 $ 1,595
Securities 68 68 64 136 140
Deposits with
regulated financial
institutions 3 4 26 7 62
--------- --------- --------- --------- ---------
567 623 866 1,190 1,797
--------- --------- --------- --------- ---------
Interest expense:
Deposits 159 225 381 384 822
Interest bearing
liabilities of
subsidiaries, other
than deposits 31 38 52 69 107
Debentures 9 10 10 19 20
--------- --------- --------- --------- ---------
199 273 443 472 949
--------- --------- --------- --------- ---------
Net interest income 368 350 423 718 848
--------- --------- --------- --------- ---------
Non-interest revenue
Deposit and payment
service charges 27 27 28 54 55
Credit fees 39 34 30 73 62
Capital market fees 34 26 27 60 49
Investment
administration fees 28 26 35 54 68
Foreign exchange 9 10 13 19 24
Trade finance 6 7 6 13 11
Trading revenue 62 76 14 138 68
Gains (losses) on
available-for-sale
securities 21 (1) - 20 -
Gains on other
securities 1 1 1 2 2
Securitization income 4 35 23 39 50
Other 20 2 27 22 54
--------- --------- --------- --------- ---------
251 243 204 494 443
--------- --------- --------- --------- ---------
Total revenue 619 593 627 1,212 1,291
--------- --------- --------- --------- ---------
Non-interest expenses:
Salaries and employee
benefits 165 160 169 325 340
Premises and equipment 43 41 39 84 77
Other 95 90 103 185 204
--------- --------- --------- --------- ---------
303 291 311 594 621
--------- --------- --------- --------- ---------
Net operating income
before provision for
credit losses 316 302 316 618 670
Provision for credit
losses 126 161 82 287 157
--------- --------- --------- --------- ---------
Income before taxes and
non-controlling interest
in income of trust 190 141 234 331 513
Provision for income taxes 54 39 64 93 153
Non-controlling interest
in income of trust 7 6 7 13 13
--------- --------- --------- --------- ---------
Net income $ 129 $ 96 $ 163 $ 225 $ 347
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Preferred share
dividends 15 11 5 26 9
--------- --------- --------- --------- ---------
Net income attributable
to common shares $ 114 $ 85 $ 158 $ 199 $ 338
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Average common shares
outstanding (000) 498,668 498,668 526,349 498,668 526,349
Basic earnings per
share (C$) 0.23 0.17 0.30 0.40 0.64
(1) Restated to reflect the acquisition of HSBC Financial Corporation
Limited.
HSBC Bank Canada Condensed Consolidated Balance Sheet (Unaudited)
-------------------------------------------------------------------------
At At At
30 June 31 December 30 June(1)
Figures in C$ millions 2009 2008 2008
------------- ------------ ------------
Assets
Cash resources:
Cash and non-interest bearing
deposits with the Bank of
Canada and other banks $ 688 $ 434 $ 549
Deposits with regulated
financial institutions 1,322 1,421 2,755
------------- ------------ ------------
2,010 1,855 3,304
------------- ------------ ------------
Securities:
Available-for-sale 10,866 9,683 6,869
Held-for-trading 2,222 1,079 1,408
Other 53 56 48
------------- ------------ ------------
13,141 10,818 8,325
------------- ------------ ------------
Securities purchased under
reverse repurchase agreements 6,211 6,682 6,970
------------- ------------ ------------
Loans:
Business and government 20,401 23,067 21,930
Residential mortgages 11,580 11,869 12,454
Consumer finance loans 3,494 4,029 4,654
Other consumer loans 5,617 5,296 6,470
Allowance for credit losses (718) (615) (544)
------------- ------------ ------------
40,374 43,646 44,964
------------- ------------ ------------
Other:
Customers' liability under
acceptances 5,605 5,209 5,740
Derivatives 1,419 2,448 579
Land, buildings and equipment 121 126 138
Other assets 1,593 1,265 2,520
------------- ------------ ------------
8,738 9,048 8,977
------------- ------------ ------------
$ 70,474 $ 72,049 $ 72,540
------------- ------------ ------------
------------- ------------ ------------
Liabilities and Shareholders'
equity
Deposits:
Regulated financial
institutions $ 1,040 $ 1,264 $ 1,439
Individuals 22,036 21,064 19,465
Businesses and governments 26,497 29,634 30,347
------------- ------------ ------------
49,573 51,962 51,251
------------- ------------ ------------
Other:
Acceptances 5,605 5,209 5,740
Interest bearing liabilities
of subsidiaries, other
than deposits 3,276 4,164 5,337
Derivatives 1,088 2,023 591
Securities sold under
repurchase agreements 1,892 715 372
Securities sold short 925 631 818
Other liabilities 2,548 1,974 3,385
Non-controlling interest in
trust and subsidiary 430 430 430
------------- ------------ ------------
15,764 15,146 16,673
------------- ------------ ------------
Subordinated debentures 826 788 802
------------- ------------ ------------
Shareholders' equity:
Capital stock
Preferred shares 946 696 350
Common shares 1,225 1,225 1,293
Contributed surplus 2 - 235
Retained earnings 2,004 1,950 1,944
Accumulated other
comprehensive income 134 282 (8)
------------- ------------ ------------
4,311 4,153 3,814
------------- ------------ ------------
Total liabilities and
shareholders' equity $ 70,474 $ 72,049 $ 72,540
------------- ------------ ------------
------------- ------------ ------------
(1) Restated to reflect the acquisition of HSBC Financial Corporation
Limited.
Condensed Consolidated
HSBC Bank Canada Statement of Cash Flows (Unaudited)
-------------------------------------------------------------------------
Quarter ended Half-year ended
----------------------------- -------------------
Figures in C$ millions 30 June 31 March 30 June(1) 30 June 30 June(1)
2009 2009 2008 2009 2008
--------- --------- --------- --------- ---------
Cash flows provided by
(used in):
- operating activities $ (95) $ 133 $ 464 $ 38 $ 733
- financing activities 324 (2,340) 1,002 (2,016) 2,449
- investing activities 13 2,220 (1,453) 2,233 (3,188)
--------- --------- --------- --------- ---------
Increase (decrease)
in cash and cash
equivalents 242 13 13 255 (6)
Cash and cash
equivalents,
beginning of period 433 420 509 420 528
--------- --------- --------- --------- ---------
Cash and cash
equivalents, end
of period $ 675 $ 433 $ 522 $ 675 $ 522
--------- --------- --------- --------- ---------
--------- --------- --------- --------- ---------
Represented by:
- Cash resources per
balance sheet $ 688 $ 446 $ 549
- less non-operating
deposits(*) (13) (13) (27)
--------- --------- ---------
- Cash and cash
equivalents,
end of period $ 675 $ 433 $ 522
--------- --------- ---------
--------- --------- ---------
(*) Non-operating deposits are comprised primarily of cash restricted for
recourse on securitization transactions.
(1) Restated to reflect the acquisition of HSBC Financial Corporation
Limited.
For further information: Media enquiries to: Ernest Yee, (604) 641-2973;
Sharon Wilks, (416) 868-3878
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