hsba201105266k.htm
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  May
 
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- ..............).
 
 
 
 
 
26 May 2011
 
HSBC BANK MALAYSIA BERHAD
RESULTS FOR THE QUARTER ENDED 31 MARCH 2011 - HIGHLIGHTS
 
 
·    Profit before tax for the three months ended 31 March 2011 was MYR295m, marginally lower than in the same period in 2010 as steeper operating expenses and loan impairment charges offset the growth in operating income.
 
 
·     Operating income grew to MYR641m, an increase of MYR44m or 7.3% compared with the same period in 2010. This was mainly due to higher income from Islamic banking operations of MYR95m, an increase of MYR18m or
       23.4%, and higher trading profits of MYR149m, an increase of MYR15m or 11.4%.
 
    
·     Loan impairment charges and other credit risk provisions increased by MYR19m or 64.1% to MYR49m for the three months ended 31 March 2011 compared with the same period in 2010.
 
 
·    Cost efficiency ratio for the three months ended 31 March 2011 deteriorated to 46.3% from 45.3% for the same period in 2010.
 
 
·    Total assets of MYR66.5bn at 31 March 2011 increased from MYR63.8bn at 31 December 2010 (31 March 2010: MYR58.1bn).
 
 
·    Core capital ratio and risk-weighted capital ratio (net of proposed dividends) remain strong at 9.1% and 13.2% respectively at 31 March 2011. This was slightly lower compared with 9.6% and 13.7% respectively at 31 December
     2010 (31 March 2010: 10.7% and 13.3% respectively) as risk weighted assets increased 4.7% to MYR40.0bn (31 December 2010: MYR38.2bn; 31 March 2010: MYR31.1bn) in line with the growth in the balance sheet.
 
 
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.
 
Commentary
 
Mukhtar Hussain, Deputy Chairman and Chief Executive Officer of HSBC Bank Malaysia Berhad ('the Bank') and Global CEO, HSBC Amanah, commented:
 
"We recorded a healthy increase of MYR44m or 7.3% in operating income, primarily on increased income from our Islamic banking operations, better trading profits and higher net interest income. There was a marginal dip in profits, due to higher operating expenses and higher collective impairment provisions on loans, advances and financing that increased in line with the demand for credit, but we are confident that our financial performance will improve over the remaining part of the financial year."
 
"We remain optimistic on the bank's prospects as the Malaysian economy is expected to expand around 5% this year, sustained by strong domestic demand. The public sector continues to be supportive of domestic growth with the implementation of various infrastructure development projects outlined in the Economic Transformation Programme and the Tenth Malaysia Plan. We are anticipating an increase in companies tapping the market for funds for these projects and are looking to capitalise on this."
 
Financial Commentary
 
HSBC Bank Malaysia Berhad reported profit before tax of MYR295m in the first three months of 2011 (MYR297m for the same period in 2010), a decrease of 0.6% or MYR2m compared with the same period last year. This was despite an increase in operating income of MYR44m or 7.3% compared with the corresponding financial period as higher operating expenses (up MYR26m) and loan impairment charges (up MYR19m) offset the increase in operating income and contributed to the decline in profit before tax.
 
Other operating expenses for the three months ended 31 March 2011 increased by 9.6% or MYR26m to MYR297m compared with MYR271m for the same period in 2010, mainly due to higher general administrative expenses (up MYR16m or 19.7%) and personnel expenses (up MYR12m or 8.8%). General administrative expenses were higher mainly on increased recharges for Group Marketing Support services, while higher personnel expenses were in line with the increase in headcount due to expansion of the business.
 
Loan impairment charges and other credit risk provisions for the three months ended 31 March 2011 increased by MYR19m or 64.1% against the corresponding period in 2010, mainly on higher collective impairment provisions (up MYR16m) due to the expansion in the gross loans, advances and financing base.
 
Operating income grew to MYR641m, an increase of MYR44m or 7.3% compared with the same period in 2010. This was mainly due to higher income from Islamic banking operations of MYR95m, an increase of MYR18m or 23.4%, higher trading profits of MYR149m, an increase of MYR15m or 11.4%, and higher net interest income of MYR279m, an increase of MYR11m or 4.1%.
 
Income from Islamic banking operations showed strong growth as Islamic financing continues to gain momentum in the local and international financial industry while increased trading profits were primarily from higher net interest income on financial assets held-for-trading and higher foreign currency gains that were partly offset by lower gains from trading in derivatives. Meanwhile, net interest income rose on account of the rising interest rate environment and larger gross loans, advances and financing base.
 
Total assets increased by MYR2.7bn or 4.2% to MYR66.5bn compared with 31 December 2010, in tandem with the increase in deposits from customers of MYR3.0bn or 6.3% (31 March 2011: MYR51.4bn; 31 December 2010: MYR48.3bn). Gross loans, advances and financing at 31 March 2011 stood at MYR36.2bn, MYR1.2bn or 3.4% higher than the MYR35.0bn recorded at 31 December 2010.
  
Note to editors:
 
HSBC Bank Malaysia Berhad
HSBC Bank Malaysia Berhad is a wholly-owned subsidiary of the HSBC Group. HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from around 7,500 offices in 87 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. With assets of US$2,598bn at 31 March 2011, HSBC is one of the world's largest banking and financial services organisations. HSBC is marketed worldwide as 'the world's local bank'.
 

 
 
 

Unaudited Condensed Statements of Financial Position as at 31 March 2011
 
 
Group
  
Bank
Figures in MYR '000s
31 Mar 2011
31 Dec 2010
  
31 Mar 2011
 31 Dec 2010
           
Assets
          
Cash and short-term funds
14,926,152
11,815,604
  
13,385,581
10,658,860
Securities purchased under resale agreements
5,403,612
6,467,863
  
5,403,612
6,467,863
Deposits and placements with
  banks and other financial institutions
732,932
330,981
  
2,123,394
1,471,815
Financial assets held-for-trading
3,027,650
4,895,060
  
2,885,058
4,747,054   
Financial investments available-for-sale
4,142,084
3,400,090
  
3,816,353
3,069,425
Loans, advances and financing
35,245,717
34,076,044
  
30,322,741
29,439,768
Other assets
2,181,692
2,024,019
  
2,157,633
1,979,356
Statutory deposits with Central Bank
249,627
221,827
  
210,098
187,098
Investments in subsidiary companies
-
-
  
660,021
660,021
Property and equipment
315,681
318,481
  
299,722
302,056
Intangible assets
59,824
60,621
  
58,947
59,122
Deferred tax assets
166,233
168,344
  
146,923
150,342
Total assets
66,451,204
63,778,934
  
61,470,083
59,192,780
           
Liabilities
          
Deposits from customers
51,373,563
48,339,424
  
47,297,558
44,556,909
Deposits and placements of banks
  and other financial institutions
5,960,835
6,853,048
  
5,265,380
6,261,536
Bills and acceptances payable
355,395
429,229
  
350,052
423,698
Other liabilities
3,241,127
2,436,128
  
3,191,473
2,358,496
Recourse obligation on loans sold to National
  Mortgage Corporation
236,339
374,991
  
236,339
374,991
Provision for taxation
75,0588
103,158
  
66,981
98,710
Subordinated bonds
999,636
1,003,039
  
999,636
1,003,039
Total liabilities
62,241,953
59,539,017
  
57,407,419
55,077,379
           
Equity
          
Share capital
114,500
114,500
  
114,500
114,500
Reserves
4,094,751
3,875,417
  
3,948,164
3,750,901
Proposed dividend
-
250,000
  
-
250,000
Total equity attributable to shareholder of the
  Bank
4,209,251
4,239,917
  
4,062,664
4,115,401
           
Total liabilities and equity
66,451,204
63,778,934
  
61,470,083
59,192,780
           
Commitments and contingencies
104,288,703
87,503,362
  
102,086,802
85,680,212
 
 
 Unaudited Condensed Statements of Comprehensive Income
For the financial period ended 31 March 2011
 
 
Group
  
Bank
Figures in MYR'000s
 31 Mar 2011
 31 Mar 2010
  
 31 Mar 2011
 31 Mar 2010
             
Revenue
  
906,088
785,206
  
821,683
728,154
               
Interest income
  
518,209
438,817
  
527,835
445,962
Interest expense
(239,197)
(170,715)
  
(239,197)
(170,715)
Net interest income
279,012
268,102
  
288,638
275,247
           
Fee and commission income
118,397
113,023
  
118,397
113,023
Fee and commission expense
(4,183)
(6,839)
  
(4,183)
(6,839)
Net fee and commission income
114,214
106,184
  
114,214
106,184
           
Net trading income
149,394
134,105
  
149,394
134,105
Income from Islamic banking operations
94,780
76,824
  
-
-
Other operating income
3,579
12,245
  
26,057
35,064
Operating income before impairment losses
640,979
597,460
  
578,303
550,600
               
Loans/financing impairment charges and other
  credit risk provisions
(49,485)
(30,163)
  
(28,270)
(18,968)
Net operating income
591,494
567,297
  
550,033
531,632
             
Other operating expenses
  
(296,585)
(270,631)
  
(283,887)
(256,645)
Profit before income tax expense
294,909
296,666
  
266,146
274,987
             
Income tax expense
(74,852)
(75,225)
  
(68,439)
(70,810)
Profit for the period
220,057
221,441
  
197,707
204,177
           
Other comprehensive income
          
Fair value reserve
          
     - Change in fair value
(8,627)
(4,821)
  
(8,256)
(3,576)
     - Amount transferred to profit or loss
(256)
(4,614)
  
(256)
(4,614)
Income tax relating to components of other
  comprehensive income
2,212
1,960
  
2,120
2,051
Other comprehensive income for the
  period, net of income tax
(6,671)
(7,475)
  
(6,392)
(6,139)
           
Total comprehensive income for the period
213,386
213,966
  
191,315
198,038
           
Profit attributable to shareholders of the Bank
220,057
221,441
  
197,707
204,177
Total comprehensive income attributable to
  shareholders of the Bank
213,386
213,966
  
191,315
198,038
               
Basic earnings per MYR0.50 ordinary share
96.1 sen
96.7 sen
  
86.3 sen
89.2 sen
             
Dividends per MYR0.50 ordinary share (net)
          
- paid in respect of prior year
109.2 sen
109.2 sen
  
109.2 sen
109.2 sen


 
 
 

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: 26 May, 2011