HBC » Topics » Tu Cuenta

This excerpt taken from the HBC 6-K filed Aug 3, 2007.
Tu Cuenta packaged accounts and Premier accounts all growing by over 45 per cent compared with the previous year.

In Argentina, the successful integration of Banca Nazionale del Lavoro, a well-timed acquisition in May 2006, contributed to a 14 per cent rise in pre-tax profits to US$95 million. Once again CIBM, working with local management, helped HSBC in Argentina maintain leading positions in foreign exchange and trade services for multinational companies operating there.

This excerpt taken from the HBC 6-K filed Aug 30, 2005.
tu Cuenta’, the only integrated financial services product of its kind offered in Mexico. Average deposit balances in Mexico increased by 16 per cent to US$10.5 billion.

     The launch of a new low fixed-rate mortgage in Mexico, in response to customer demand, generated US$215 million of gross new lending, with average mortgage balances increasing by 84 per cent. Mortgage spreads narrowed due to higher funding costs on fixed rate mortgage business. HSBC Mexico regained its premier position in vehicle financing, with a market share of 27 per cent. Vehicle finance average balances grew by US$215 million to US$774 million, a 38 per cent increase over the same period in 2004.This was achieved by new product launches, targeting of new customer segments and more competitive pricing. Average payroll loan receivables in Mexico increased by over 115 per cent to US$206 million, reflecting HSBC’s market-leading ability to grant pre-approved personal loans over its ATM network.

     In HSBC Bank Canada, net interest income grew by 13 per cent due to volume growth in personal loan and mortgage balances along with a widening in deposit spreads.

     Other income grew by 11 per cent to US$2,063 million, compared with the first half of 2004.

     In the US, the 13 per cent increase was mainly driven by higher income from credit cards, deposit-related services and the taxpayer financial services business. Income within the credit cards business grew, mainly driven by a 10 per cent increase in fee income. This was largely attributable to higher transaction volumes and improved interchange rates. Usage of the ‘intellicheck’ product, enabling customers to pay their credit card balances over the telephone, also increased over the previous year. Revenues from enhancement service products grew, driven primarily by new products launched during the first half of 2005.

     A revised fee structure, introduced in the second half of 2004, helped generate an 11 per cent growth in fee income from deposit-related services. Within the taxpayer financial services business, fee income also grew by 11 per cent, as a result of increased transaction volumes. Since June 2004, HSBC has


 

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captured in-house the clearing business for refund anticipation payments. Historically this was carried out by a third party bank.

     Losses from sales of real estate repossessed by HSBC due to customers defaulting on their mortgage payments, were US$90 million lower than the first half of 2004. This was attributable to improvements in the process by which the fair market value is determined at the time of repossession. Revenues in the US mortgage banking business improved over the previous year. Servicing-related income grew, driven by a reduction in the amortisation of mortgage servicing rights (‘MSRs’), which in turn was the result of lower levels of mortgage prepayments. Income from derivatives used to offset changes in the economic value of MSRs also increased in 2005 to US$19 million compared with a US$25 million loss in 2004. The increase in originations and sales-related income was attributable to a higher basis point gain on each individual sale. During 2005, residential mortgages originated with the intention to sell were consistent with 2004. A higher proportion of adjustable rate residential mortgage loans is being sold in 2005, which previously would have been held on the balance sheet.

     In HSBC Mexico, the 14 per cent increase in net fee income to US$208 million was partly due to the continued expansion of the pension funds business. Higher fee income arose from international remittances, which increased by 71 per cent, and from credit cards. The ‘Afore’ pension funds business attracted 170,000 new customers during the first half of the year, which helped to grow revenues by 57 per cent. Mutual fund balances grew by 52 per cent, due to the successful launch of new funds aimed at different market segments, along with strong cross sales among HSBC’s extensive customer base. In the credit card business, HSBC Mexico continued to derive benefits from the enhanced customer relationship management system, increasing the number of cards in circulation by 59 per cent to 794,000. This helped drive the 54 per cent increase in credit card fee income to US$33 million. Strong sales of insurance products in Mexico resulted from increased cross-selling within the branch network.

     In HSBC Canada, other income declined by 36 per cent, largely attributable to the non-recurrence of the gain on sale of the Canadian Direct Insurance business in the first half of 2004.

     Loan impairment charges and other credit risk provisions fell by 13 per cent to US$2,097 million compared with the first half of 2004, as credit

conditions in the US improved and collection activity increased. An increase in secured lending compared with historic levels also contributed to the lower charge. Although there was strong growth in lending balances in Mexico, general improvements in the credit quality of the loan portfolios resulted in a fall in new provisions.

     Operating expenses of US$3,686 million were 11 per cent higher than in the first half of 2004.

     Expansion of the US banking branch network drove the 9 per cent increase in total operating costs with 7 new branches opened in the first half of 2005. Pension and retirement savings plan costs in the US bank also increased. Costs increased in order to support income growth initiatives within the mortgage and consumer lending businesses. Staff numbers increased in the consumer lending branch network and in the mortgage services business to support growth in business volumes.

     Within the credit card business, increased marketing expenditure of US$103 million was primarily due to changes in contractual obligations associated with the General Motors’ co-branded credit card portfolio in July 2004. This was partly offset by lower account origination costs. Marketing expenses also increased in support of income growth initiatives, particularly in the non-prime credit card markets. Other administrative expenses, mainly systems, legal, professional and consulting costs increased in line with the growth in volumes across all the major product lines.

     In Mexico, higher staff costs were incurred to support growth in business volumes and to improve customer service, while the roll-out of new systems to meet Group standards drove a 29 per cent increase in IT-related expenditure.

     Operating expenses fell by 8 per cent in Canada. This was mainly due to the non-recurrence of restructuring costs incurred in relation to the acquisition of Intesa Bank Canada in 2004, partly offset by an increase in general and administration costs in support of higher business volumes.

     

This excerpt taken from the HBC 6-K filed Aug 5, 2005.
tu Cuenta’, the only integrated financial services product of its kind offered in Mexico. Average deposit balances in Mexico increased by 16 per cent to US$10.5 billion.

     The launch of a new low fixed-rate mortgage in Mexico, in response to customer demand, generated US$215 million of gross new lending, with average mortgage balances increasing by 84 per cent. Mortgage spreads narrowed due to higher funding costs on fixed rate mortgage business. HSBC Mexico regained its premier position in vehicle financing, with a market share of 27 per cent. Vehicle finance average balances grew by US$215 million to US$774 million, a 38 per cent increase over the same period in 2004.This was achieved by new product launches, targeting of new customer segments and more competitive pricing. Average payroll loan receivables in Mexico increased by over 115 per cent to US$206 million, reflecting HSBC’s market-leading ability to grant pre-approved personal loans over its ATM network.

     In HSBC Bank Canada, net interest income grew by 13 per cent due to volume growth in personal loan and mortgage balances along with a widening in deposit spreads.

     Other income grew by 11 per cent to US$2,063 million, compared with the first half of 2004.

     In the US, the 13 per cent increase was mainly driven by higher income from credit cards, deposit-related services and the taxpayer financial services business. Income within the credit cards business grew, mainly driven by a 10 per cent increase in fee income. This was largely attributable to higher transaction volumes and improved interchange rates. Usage of the ‘intellicheck’ product, enabling customers to pay their credit card balances over the telephone, also increased over the previous year. Revenues from enhancement service products grew, driven primarily by new products launched during the first half of 2005.

     A revised fee structure, introduced in the second half of 2004, helped generate an 11 per cent growth in fee income from deposit-related services. Within the taxpayer financial services business, fee income also grew by 11 per cent, as a result of increased transaction volumes. Since June 2004, HSBC has


 

64


Back to Contents

captured in-house the clearing business for refund anticipation payments. Historically this was carried out by a third party bank.

     Losses from sales of real estate repossessed by HSBC due to customers defaulting on their mortgage payments, were US$90 million lower than the first half of 2004. This was attributable to improvements in the process by which the fair market value is determined at the time of repossession. Revenues in the US mortgage banking business improved over the previous year. Servicing-related income grew, driven by a reduction in the amortisation of mortgage servicing rights (‘MSRs’), which in turn was the result of lower levels of mortgage prepayments. Income from derivatives used to offset changes in the economic value of MSRs also increased in 2005 to US$19 million compared with a US$25 million loss in 2004. The increase in originations and sales-related income was attributable to a higher basis point gain on each individual sale. During 2005, residential mortgages originated with the intention to sell were consistent with 2004. A higher proportion of adjustable rate residential mortgage loans is being sold in 2005, which previously would have been held on the balance sheet.

     In HSBC Mexico, the 14 per cent increase in net fee income to US$208 million was partly due to the continued expansion of the pension funds business. Higher fee income arose from international remittances, which increased by 71 per cent, and from credit cards. The ‘Afore’ pension funds business attracted 170,000 new customers during the first half of the year, which helped to grow revenues by 57 per cent. Mutual fund balances grew by 52 per cent, due to the successful launch of new funds aimed at different market segments, along with strong cross sales among HSBC’s extensive customer base. In the credit card business, HSBC Mexico continued to derive benefits from the enhanced customer relationship management system, increasing the number of cards in circulation by 59 per cent to 794,000. This helped drive the 54 per cent increase in credit card fee income to US$33 million. Strong sales of insurance products in Mexico resulted from increased cross-selling within the branch network.

     In HSBC Canada, other income declined by 36 per cent, largely attributable to the non-recurrence of the gain on sale of the Canadian Direct Insurance business in the first half of 2004.

     Loan impairment charges and other credit risk provisions fell by 13 per cent to US$2,097 million compared with the first half of 2004, as credit

conditions in the US improved and collection activity increased. An increase in secured lending compared with historic levels also contributed to the lower charge. Although there was strong growth in lending balances in Mexico, general improvements in the credit quality of the loan portfolios resulted in a fall in new provisions.

     Operating expenses of US$3,686 million were 11 per cent higher than in the first half of 2004.

     Expansion of the US banking branch network drove the 9 per cent increase in total operating costs with 7 new branches opened in the first half of 2005. Pension and retirement savings plan costs in the US bank also increased. Costs increased in order to support income growth initiatives within the mortgage and consumer lending businesses. Staff numbers increased in the consumer lending branch network and in the mortgage services business to support growth in business volumes.

     Within the credit card business, increased marketing expenditure of US$103 million was primarily due to changes in contractual obligations associated with the General Motors’ co-branded credit card portfolio in July 2004. This was partly offset by lower account origination costs. Marketing expenses also increased in support of income growth initiatives, particularly in the non-prime credit card markets. Other administrative expenses, mainly systems, legal, professional and consulting costs increased in line with the growth in volumes across all the major product lines.

     In Mexico, higher staff costs were incurred to support growth in business volumes and to improve customer service, while the roll-out of new systems to meet Group standards drove a 29 per cent increase in IT-related expenditure.

     Operating expenses fell by 8 per cent in Canada. This was mainly due to the non-recurrence of restructuring costs incurred in relation to the acquisition of Intesa Bank Canada in 2004, partly offset by an increase in general and administration costs in support of higher business volumes.

     

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