FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of November, 2006
HSBC Holdings plc
42nd Floor, 8 Canada
Square, London E14 5HQ, England
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F).
Form 20-F X Form 40-F ......
(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934).
Yes....... No X
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- ..............)
HSBC BANK MALAYSIA BERHAD
RESULTS FOR THE NINE MONTHS ENDED 30 SEPTEMBER 2006 - HIGHLIGHTS
- Profit before allowance for losses on loans and financing up 38.1 per
cent to MYR782 million for the nine months ended 30 September 2006 (MYR566
million for the same period in 2005).
- Profit before taxation of MYR706 million for the nine months ended 30
September 2006, MYR132 million or 23.1 per cent higher than the MYR574
million reported for the same period in 2005.
- Cost efficiency ratio improved to 45.7 per cent from 50.2 per cent for
the corresponding period in 2005.
Net interest income for the nine months ended 30 September 2006 was up 21.6 per
cent to MYR723 million (MYR594 million for the same period in 2005). This was
principally driven by loan growth of MYR3.2 billion, or 14.8 per cent
year-on-year. This favourable performance was also attributed to three upward
revisions to our base lending rate (BLR) of 25 basis points each in December
2005, February 2006 and April 2006 and the bank's strategy to focus on higher
margin products.
Other operating income for the nine months ended 30 September 2006 increased
27.6 per cent to MYR594 million (MYR465 million for the same period in 2005).
This was supported by:
- foreign exchange trading profits due to increased hedging activity by
corporates, and greater trading opportunities arising from foreign exchange
rate volatility; and
- profit gain from the disposal of a merchant acquiring credit card
business in July 2006 to a joint venture between HSBC and Global Payments
Inc.
Income from Islamic banking operations rose by 61.2 per cent for the nine months
ended 30 September 2006 to MYR123 million (MYR76 million in the same period last
year). This was due to growth in the bank's Islamic balance sheet - up MYR1.5
billion, or 38.9 per cent, to MYR5.5 billion compared to the same period last
year.
Other operating expenses at MYR658 million (MYR570 million for the nine months
ended 30 September 2005) were up 15.4 per cent mainly as a result of higher
staff costs as total staff count increased, and higher inter-company expenses.
Allowance for losses on loans and financing was MYR76 million for the nine
months ended 30 September 2006 compared to net write-back of MYR7.5 million for
the nine months ended September 2005. This was mainly due to significant
specific allowance release from a number of large, previously non-performing
loans in 2005.
Total assets of MYR40.8 billion at 30 September 2006 grew by MYR4.3 billion, or
11.6 per cent, compared with MYR36.5 billion at 31 December 2005, mainly
attributed to higher loans, advances and financing (up MYR3 billion or 13.8 per
cent).
The increase in total assets was primarily funded by customer deposits (up
MYR2.4 billion or 8.5 per cent compared to 31 December 2005) as a result of
various deposit campaigns run as part of our strategy to grow liabilities.
Zarir J Cama, deputy chairman and CEO of HSBC Bank Malaysia Berhad, said: "HSBC
Bank Malaysia Berhad achieved a record profit before tax of MYR706 million in
the first nine months of the year, 23 per cent higher than the corresponding
period in 2005. This demonstrates the success of our strategies, and I am
confident that we can sustain this momentum going forward.
"We are well positioned to tap the business opportunities in areas of growth,
amid the fast changing and expanding business environment under the Malaysian
Government's liberalisation of the banking industry. We will continue to grow
our Islamic banking book and, at the same time, focus on our Takaful business to
help position Malaysia as a global Islamic financial centre. During the quarter,
we achieved one million credit cards in circulation and we are now one of the
top three credit card issuers in Malaysia. We will focus on increasing our
revenue by deepening relationships with our existing and new customer base. We
will also grow our SME portfolio by offering our clients customised business and
trade services.
"In order to drive our business to the next level, we have focused on improving
customer service quality, introduced innovative products, enhanced productivity
and increased brand visibility."
UNAUDITED CONDENSED BALANCE SHEET AT 30 SEPTEMBER 2006
Group Bank
Figures in MYR '000s 30Sep06 31Dec05 30Sep06 31Dec05
Assets
Cash and short-term funds 6,196,863 7,710,602 6,196,863 7,710,602
Securities purchased under
resale agreements 2,396,431 1,449,760 2,396,431 1,449,760
Deposits and placements
with banks and other
financial institutions 1,231,157 479,942 1,231,157 479,942
Securities held-for-trading 1,089,987 703,727 1,089,987 703,727
Securities
available-for-sale 3,587,203 3,284,735 3,587,203 3,284,735
Loans, advances and
financing 24,437,948 21,476,706 24,437,948 21,476,706
Other assets 565,823 371,825 565,823 371,825
Statutory deposits with
Bank Negara Malaysia 898,448 698,948 898,448 698,948
Investment in subsidiary
companies - - 21 21
Property, plant and
equipment 302,573 304,916 302,573 304,916
Intangible assets 21,474 5,228 21,474 5,228
Deferred tax assets 72,000 59,851 72,000 59,851
Total assets 40,799,907 36,546,240 40,799,928 36,546,261
Liabilities
Deposits from customers 30,720,761 28,317,351 30,720,782 28,317,372
Deposits and placements of
banks and other financial
institutions 2,849,630 1,954,799 2,849,630 1,954,799
Obligations on securities
sold under repurchased
agreements 1,899,921 1,617,617 1,899,921 1,617,617
Bills and acceptances
payable 468,419 475,940 468,419 475,940
Other liabilities 1,252,852 942,517 1,252,852 942,517
Recourse obligation on
loans sold to Cagamas
Berhad 923,404 787,931 923,404 787,931
Provision for taxation
and zakat 64,723 29,716 64,723 29,716
Total liabilities 38,179,710 34,125,871 38,179,731 34,125,892
Shareholders' funds
Share capital 114,500 114,500 114,500 114,500
Reserves 2,505,697 2,155,869 2,505,697 2,155,869
Proposed dividend - 150,000 - 150,000
Shareholders' funds 2,620,197 2,420,369 2,620,197 2,420,369
Total liabilities and
shareholders' funds 40,799,907 36,546,240 40,799,928 36,546,261
Commitments and
contingencies 63,288,414 47,716,860 63,288,414 47,716,860
UNAUDITED CONDENSED INCOME STATEMENT
FOR THE THIRD QUARTER/PERIOD ENDED 30 SEPTEMBER 2006
Group and Bank
Third quarter ended Nine months ended
Figures in MYR '000s 30Sep06 30Sep05 30Sep06 30Sep05
Revenue 779,309 597,081 2,097,632 1,647,154
Interest income 465,174 368,905 1,285,463 1,062,897
Interest expense (211,870) (164,466) (562,903) (468,698)
Net interest income 253,304 204,439 722,560 594,199
Other operating income 231,397 183,080 593,825 465,222
Income from Islamic
banking operations 49,490 29,681 123,206 76,429
Operating income 534,191 417,200 1,439,591 1,135,850
Other operating expenses (211,912) (210,090) (657,687) (569,686)
Profit before allowance 322,279 207,110 781,904 566,164
Allowance for losses on
loans and financing (29,219) 30,325 (75,761) 7,533
Profit before taxation 293,060 237,435 706,143 573,697
Taxation (78,498) (67,439) (202,806) (163,310)
Profit attributable to
shareholders 214,562 169,996 503,337 410,387
Earnings per MYR0.50
ordinary share
- basic/diluted 93.7 sen 74.2 sen 219.8 sen 179.2 sen
Dividends per MYR0.50
ordinary share (net)
- paid in respect of
prior year - - 65.5 sen 43.7 sen
- interim dividend paid 65.5 sen 52.4 sen 65.5 sen 52.4 sen
Remarks:
1. Change in Accounting Policy
During the nine months ended 30 September 2006, the bank adopted a new
accounting standard, FRS2 on Share-based Payment. FRS2 requires companies to
adopt a fair-value-based method of accounting for share-based compensation plans
which takes into account vesting conditions related to market performance, for
example total shareholder return. Under this method, compensation cost is
measured at the date of grant based on the assessed value of the award and is
recognised over the service period, which is usually the vesting period. The
fair value of share options granted is to be recognised in the income statement.
The change in accounting policy has been accounted for by restating comparatives
as disclosed in note 2 (a).
2. Comparative Figures
The presentation and classification of items in the current third quarter
financial statements have been consistent with the previous financial period/
year except for the following:
(a) Changes in accounting policy explained in note 1.
Group Bank
As As
previously As previously
As restated stated restated stated
RM'000 RM'000 RM'000 RM'000
Balance sheet
at31Dec05
Securities
available
-for-sale 3,284,735 3,277,490 3,284,735 3,277,490
Other assets 371,825 376,829 371,825 376,829
Deferred tax asset 59,851 53,547 59,851 53,547
Other liabilities 942,517 917,761 942,517 917,761
Reserves 2,155,869 2,172,080 2,155,869 2,172,080
Group and Bank
As
As previously
restated stated
RM'000 RM'000
Income statement for the third
financial quarter
ended 30Sept05
Other operating expenses 569,686 562,454
Profit before allowance 566,164 573,396
Profit before taxation 573,697 580,929
Profit attributable to
shareholders 410,387 415,594
Earnings per RM0.50 share 179.2 sen 181.5 sen
(b) Reclassification to conform the current years' presentation.
Group and Bank
As
As previously
restated stated
RM'000 RM'000
Balance sheet at 31Dec05
Property, plant and equipment 304,916 310,144
Intangible assets 5,228 -
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HSBC Holdings plc
By:
Name: P A Stafford
Title: Assistant Group Secretary
Date: 20 November, 2006