HSBC Bank Canada reported a profit before income tax expense of $187 million for Q3 2015. That’s a decrease of $44 million, or 19%, compared to the third quarter of 2014.
And, as of Q3, profit before income tax expense for the year was $645 million, a decrease of $61 million, or 9%, compared to the same period in 2014.
Profit before tax was lower mainly due to:
- lower net interest margins;
- lower gains on financial investments;
- higher loan impairment charges; and
- higher planned costs, which were only partially offset by increased credit facility and corporate finance fees from the comparative periods in 2014.
The strength of Commercial Banking is boosting business growth. In particular, momentum in new-to-bank activities increased by 47% year-over-year. However, the current environment has tempered utilization of authorized credit facilities and capital spending.
During the quarter, Retail Banking and Wealth Management also continued to achieve sustainable and balanced growth in residential mortgages and deposits. It also benefitted from increases in wealth balances during the first half of the year. Further, the competitive low-interest-rate environment is supporting the retail banking and wealth business.
Sandra Stuart, president and CEO of HSBC Bank Canada, says, “The continued slow-growth, low-rate environment is challenging our revenue line […] [But] core retail banking products, including mortgages, continued to grow. [And] Commercial Banking has grown its customer base.”
Finally, aside from planned investments in the risk and compliance areas, HSBC says there has been good cost discipline across all of its businesses and functions. And, looking ahead, the bank is focused on growing its business in Canada despite pressure on the oil sector and related industries.