HSBC 2013 Annual Report Download - page 9

Download and view the complete annual report

Please find page 9 of the 2013 HSBC annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 127

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127

7
Financial performance
Summary consolidated income statement
2013
$m
2012
$m
Net interest income ........................................................................................................ 1,311 1,475
Net fee income ............................................................................................................... 603 601
Net trading income ......................................................................................................... 178 180
Net expense from financial instruments designated at fair value .................................. (5) (27)
Gains less losses from financial investments ................................................................. 58 52
Other operating income .................................................................................................. 16 24
Gain on sale of full service brokerage business ............................................................. –88
Net operating income before loan impairment charges and other credit risk provisions ... 2,161 2,393
Loan impairment charges and other credit risk provisions ............................................ (188) (211)
Net operating income ..................................................................................................... 1,973 2,182
Total operating expenses (excluding restructuring charges) .......................................... (1,070) (1,122)
Restructuring charges ..................................................................................................... –(36)
Operating profit .............................................................................................................. 903 1,024
Share of profit in associates ........................................................................................... 31 5
Profit before income tax expense ................................................................................... 934 1,029
Income tax expense ........................................................................................................ (247) (275)
Profit for the year ........................................................................................................... 687 754
Overview
HSBC Bank Canada reported a profit before income tax
expense for 2013 of $934m, a decrease of $95m, or 9%,
compared with 2012.
Profit before income tax expense for the prior year
included a gain on the sale of the full service brokerage
business of $88m and a restructuring charge of $36m
mostly relating to the wind-down of the bank’s consumer
finance business. Excluding the impact of these items,
profit before income tax expense for the year decreased
by $43m, or 4%, compared with the prior year primarily
due to lower net interest income from the declining loan
balances of the run-off consumer finance portfolio as
well as a reduction in net interest spread. The decrease
is partially offset by lower operating expenses as a result
of our ongoing organizational effectiveness programs,
which resulted in sustainable cost savings as well as
an increase in value of the bank’s investment in private
equity funds. Also partially offsetting the decrease
were lower loan impairment charges primarily from a
reduction in collectively assessed provisions driven by
declining loan balances of the run-off consumer finance
portfolio, as well as tightening credit spreads on our own
subordinated debentures designated at fair value.