HSBC Holdings Regulatory News (HSBA)

27 Jul 2005 09:16

HSBC Holdings PLC27 July 2005 The following text is the English translation of a news release issued inGermany by HSBC Trinkaus & Burkhardt which is approximately 73.5 per centindirectly owned by HSBC Holdings plc. HSBC TRINKAUS & BURKHARDT REPORTS INCREASED NET FEES AND INTEREST INCOME IN FIRST HALF 2005 • Net fees & commissions increased by 12.4 per cent to EUR123.5 million in the first six months of 2005; net interest income rose by 10.3 per cent to EUR35.4 million. • Operating profit of EUR48.9 million was slightly higher than the strong performance reported in the first half of 2004 (EUR48.8 million). • This autumn, T-Systems International GmbH will acquire 49 per cent of International Transaction Services GmbH, creating a new joint venture designed to acquire increasingly high quality mandates in securities processing. HSBC Trinkaus & Burkhardt, which is approximately 73.5 per cent indirectly ownedby HSBC Holdings plc, reported operating profits of EUR48.9 million, slightlyhigher than the strong result reported in the first half of 2004 (EUR48.8million). The increase in operating profit reflected an expansion of customerbusiness resulting in both higher net fees and commissions and net interestincome. However, trading profits were lower than in the comparable period in2004. Net profit after tax fell in the first half of 2005 to EUR40.7 million;13.6 per cent lower than the comparable period last year. This fall is mainlydue to the impact of disposing of the indirect holding in HSBC Guyerzeller Bankin 2004 which contributed EUR18.5 million. The most important element of the bank's profit, net fees and commissions,increased in the first six months by 12.4 per cent or EUR13.6 million toEUR123.5 million. An improving stock market, which did not initially translateinto higher levels of business from institutional and private customers,resulted in higher securities commissions in the latter part of the first halfof 2005. Net interest income rose in the first half, by 10.3 per cent, or EUR3.3 million,to EUR35.4 million, reversing the fall reported in 2004. The pressure oninterest margins was more than compensated for by the impact of higher volumesof deposits and lending to banks in the money markets. Risk provisions on credit business remained low, totalling EUR1.6 millioncompared to EUR2.1 million in the first half of 2004. The bank's conservativecredit policy protected it from large losses. Trading profits, totalling EUR27.3 million, were 18 per cent lower than thecomparable period in 2004. The decrease resulted from lower profits from bank'sproprietary assets, which made a significant contribution to last year's tradingprofits. The operative trading divisions have met the Managing Partners'expectations. Trading in equity and index-related derivatives were the highestcontribution to trading profits. Total administrative expenses rose by 7.1 per cent to EUR135.9 million. Theincrease in expenses was mainly due to an increase in the number of employees,especially in fund administration and securities processing as a result ofhigher volumes and business transactions, respectively. The cost:income ratiowas maintained at 68.9 per cent; and therefore remained below the 70 per centtarget. In the first six months the bank has seen satisfactory growth, as reflected inthe good growth in assets. Revenues have continued to increase from businesswith institutional and private banking customers. The acquisition of new fundsin the high-net worth customer segment exceeded plan. In the institutionalbanking segment, the good results achieved in the prior year were furtherimproved upon with the successful diversification into fixed income sales andasset management businesses. Revenues in the corporate banking business wereslightly lower as competitors reduced margins to gain market share. HSBCTrinkaus & Burkhardt continued to be successful in winning new corporatecustomers and corporate banking business cross-referrals to the HSBC Group fromHSBC Trinkaus & Burkhardt increased. Further growth in net fees and commissions in the second half-year will dependon trends in capital markets. As planned, the securities processing businesswill be transferred to International Transaction Services GmbH. On 1 October2005, T-Systems International GmbH will acquire 49 per cent of InternationalTransactions Services GmbH. The Managing Partners are confident that this jointventure will allow it to position the company to win high-quality mandates inthe securities processing business in the future. Based on improving results in the second quarter of this year and against thebackground of anticipated positive developments in the stock market in thesecond half of 2005, the Managing Partners are optimistic that the bank willgrow operating profits in the second half and exceed the prior year's results. This information is provided by RNS The company news service from the London Stock Exchange