HSBC Bank Canada on Friday announced lower profit for the first quarter ended March 31.

The bank said net income was $73 million, a drop of $3 million, or 3.9%, from $76 million for the same quarter of 2002 and $8 million, or 12.3%, higher than the quarter ended 31 December 2002.

Excluding one-off gains and expenses, net income in the quarter was $6 million higher compared to the same period in 2002 and $13 million higher compared to the fourth quarter of 2002.

Higher net interest income and lower provisions for credit losses in the quarter were offset by lower other income and higher non-interest expenses compared to the same period in 2002.

Compared to the fourth quarter of 2002, higher net interest income, lower provisions for credit losses and lower non-interest expenses were partially offset by lower other income.

The provision for credit losses was $20 million for the quarter compared to $25 million in each of the first and fourth quarters of 2002. The lower provision level in 2003 is in line with expectations at this stage of the economic cycle.

Total assets at March 31, 2003 were $35.4 billion, up $1.5 billion from $33.9 billion at March 31, 2002 and up $0.2 billion from $35.2 billion at Dec. 31, 2002.

Funds under management were $11.5 billion for the quarter compared to $10.1 billion at March 31, 2002 and $11.9 billion at Dec. 31, 2002.

The bank’s tier 1 capital ratio was 7.9% and the total capital ratio was 10.8% at March 31, 2003. This compares with 8.7% and 11.4%, respectively, at March 31, 2002 and 8.4% and 11.4%, respectively, at Dec. 31, 2002.

In a statement, Martin Glynn, president and CEO, said: “Results for the quarter were satisfactory, given the continued uncertainty in global equity markets, and difficult economic conditions in Canada and internationally. Solid growth in personal and commercial business volumes continued to drive our performance as evidenced by higher net interest income.”

Referring to the acquisition of Household International Inc. in March 2003 by parent company HSBC Holdings plc, Glynn said, “We are excited about the prospects of working more closely with our new colleagues in Household International as this will provide us with the opportunity to offer a wider range of financial services to an expanded base of retail and commercial customers in Canada.”