HSBC Bank Malaysia Records Best Ever Financial Results

KUALA LUMPUR-HSBC Bank Malaysia Bhd recorded its best ever results in financial year ended Dec 31, 2007, with an 8.7 percent jump in pre-tax profit to RM1.032 billion from RM949 million previously.

Deputy chairman and chief executive officer, Irene M. Dorner, said the rise in profit arose from strong growth in a broad spectrum of income streams as the bank continued to invest in its business.

Speaking at a media briefing here today, Dorner said 2007 was a year of investing in the bank's organic operations for long-term growth.

"Going forward, we intend to extend our brand into the young and smart market. We want to grow and deepen our relationship with the small and medium enterprises base," she said.

In financial year 2007, the bank's revenue surged to RM3.22 billion from RM2.831 billion the year before.

Its total assets grew by RM7.1 billion or 17.4 percent to RM48.1 billion as at Dec 31, 2007, funded by a 13.1 percent increase in customer deposits, due to ample market liquidity, and RM1 billion of subordinated bonds issued in June and November last year.

Commenting on HSBC Bank Malaysia's Islamic operations, Dorner said its Islamic banking subsidiary was on target for official launching in the second half of this year.

According to her, the move is in line with the HSBC group's initiative of making Malaysia the regional hub for HSBC Amanah.

"By building HSBC Amanah, we will be launching new products and leading the industry to become a centre of excellence for Islamic finance in Asia," she said.

She also said that the bank was set to establish an international currency business unit within its existing Islamic banking operations and a similar unit will also be set up within the Islamic subsidiary, allowing the bank to expand its access to Malaysia's Islamic finance industry.

On plans for new branches, Dorner said the bank was always delighted to open new branches and it will have an opportunity with the Islamic subsidiary.

"A significant proportion of the income and business of HSBC Malaysia will come from Islamic banking over time. Currently, it is around 12 percent," she said when asked about targets for the Islamic banking business.

Income from the group's Islamic banking operation jumped 29.4 percent to RM231 million last year from RM179 million in 2006 due to increased lending in personal instalment loans and hire purchase.

On segments that will drive the bank's growth this year, Dorner said it was expecting growth across all of its business lines, including premier customer base and commercial banking business.

"There is plenty of growth in commercial banking business, like corporate banking, especially in the small and medium enterprises range. Corporate banking, for example in construction, to support the economic corridors across Malaysia and we believe there is ample space to grow," she said.

"In addition to that, across the Islamic banking, we believe significant growth because with the licence granted, we can offer a full range of products. Not just vehicle finance but possibility of asset management as well."

In financial year 2007, other operating income rose by RM107 million or 14.1 percent to RM869 million from RM762 million previously, mainly due to higher fee income and net gains from dealings in foreign exchange as more corporate customers hedged their risks.