Businessman hand showing financial report on table

A decline in profit and operating income for HSBC Bank Canada in the third quarter was partially offset by revenue growth in retail banking and wealth management.

The bank released its Q3 results on Monday, stating that its profit before income tax expense was $206 million for the quarter — a $65-million decrease from Q3 2018. Operating income for the quarter was $534 million, down 9% from Q3 2018.

In a release, the bank attributed its decline in profitability to a variance in expected credit losses and lower operating income in global banking, as well as business investments, among other factors.

The bank had a charge of $17 million for expected credit losses — compared to a reversal of $7 million a year ago — due to impairment charges from non-performing loans in the agriculture and energy sectors, and the impact of unfavourable economic outlook on performing loans.

The creation of the ServCo group, which manages HSBC’s shared services, contributed to a $20-million year-over-year decline in the bank’s other operating income.

HSBC’s retail banking and wealth management segment had operating income of $190 million — a $3-million increase year over year. This was driven by higher net interest income and growth in lending, deposits and wealth balances. But profit was down 62% compared to a year ago, due to higher operating expenses from business investments and higher charges related to credit losses.

Commercial banking saw its operating income grow by $8 million year over year, thanks to an increase in lending and deposit balances. Year-over-year profit for this business segment was flat at $141 million.

“Despite challenging market conditions and a declining interest rate environment, we again grew lending and total relationship balances in both Commercial Banking and Retail Banking and Wealth Management,” Sandra Stuart, president and CEO of HSBC Bank Canada, said in a statement.