(May 30 – 10:25 ET) – HSBC Bank Canada is reporting improved first quarter income.
Net income was up 23.7% at the bank to $47 million for the quarter ended March 31. Return on equity was 18.9% in the period.
Interest income rose 14.3% in the period thanks to higher interest rates and the bank’s focus on loan pricing. Other income was up 34.4% driven by strong equity markets. Both full-service and retail brokerage commissions were up 120% in the period. As a result, other income now accounts for 45.1% of net income, up from 41.2%.
The results are in line with expectations according to Martin Glynn, president and CEO of HSBC Canada, who says, “We continue to make solid progress in consolidating our branch support services to free resources for deepening our client relationships. Looking ahead, the integration of Republic Canada will expand the bank’s presence in Ontario and Quebec and enable us to capitalise on many cross-selling activities.” Effective April 1, HSBC acquired the Canadian operations of Republic National Bank of New York.
HSBC is also announcing a planned sale of $100 million worth of non-cumulative redeemable Class 1 preferred shares series A to redeem its outstanding Class 2 preferred shares series A. It has also created the HSBC Canada Asset Trust to purchase NHA mortgages. The trust will sell $200 million of its securities as HSBC HaTS. HSBC Securities is joined by Scotia Capital on the preferred share issue and TD Securities is helping with the HaTS.