HSBC Bank Canada recorded a 28% drop second-quarter profit, the bank said Friday.

The bank reported net income attributable to common shares of $114 million, or 23¢ a share, for the quarter ended June 30. That compared with a profit of $158 million, or 30¢ a share, in the year-earlier period.

The Vancouver-based bank said the latest results include a $17 million net loss in its consumer finance business.

Quarterly revenue was $619 million, down from year-earlier levels of $627 million.

HSBC Canada president Lindsay Gordon said a more stable interest rate environment, combined with increases in equity markets and lower loan loss provisions, helped boost the bank’s results from levels recorded in the first part of 2009, but added the effects of the global recession are still being felt.

“Although the economic outlook for the rest of 2009 remains uncertain, we remain committed to supporting our core customer relationships and stay focussed on managing costs,” Gordon said in a release.

Compared to the $85 million achieved in the first quarter of 2009, the bank’s’ net incom increased by $29 million, or 34.1%.

The bank’s Tier 1 capital ratio, a key measure of bank performance, was 11.1%, up sharply from 9.3% recorded at the same time last year.

Return on average common equity was 13.3% for the quarter, compared with 18.6% a year ago.

Total funds under management declined to $24.5 billion from $27.1 billion, while total assets slipped to $70.5 billion from $72.5 billion a year ago.

IE