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HSBC Trinkaus and Burkhardt KGaA 2005 Results
07 April 2006
The following text is the English translation of a news release issued in Germany by HSBC Holdings plc's subsidiary.
- Profit before tax up 59.1 per cent to €194.4 million; profit after tax up 50.4 per cent to €117.9 million.
- Operating profit up 33.4 per cent to €137.4 million in 2005.
- Return on equity before tax improved from 19.5 per cent to 30.6 per cent.
- Assets under management for private bank clients increased approximately 75 per cent from €11.4 billion to €19.9 billion.
- Highest profits in HSBC Trinkaus & Burkhardt's history.
HSBC Trinkaus & Burkhardt's operating profit increased by 33.4 per cent to €137.4 million last year. This performance is encouraging given the double-digit growth in operating income already achieved in 2003 and 2004. In 2005, the bank improved results significantly in all lines of business. It grew the total number of clients as well as the range of products and services offered.
The growth in product and service offerings included the rapid development of the fund management and administration businesses. Assets under management in the private banking business grew from €11.4 billion in 2004 to €19.9 billion in 2005. Funds under management and administration, an important performance indicator in asset management and in funds administration, rose by more than 50 per cent from €41.8 billion to €62.8 billion. Proprietary trading also performed well, building on good results seen in 2004.
Net fees and commissions, the most important contributor of the bank's profits, improved by 16.8 per cent from €226.4 million to €264.4 million. Net interest income rose by 7.6 per cent from €69.3 million to €74.6 million. Trading profits advanced by 36.6 per cent from €54.4 million to €74.3 million. Risk provisions in the lending business were reduced in 2005 while the bank continues to adhere to its traditionally conservative credit policies. Alongside a reduction in provisions, significant reversals were realised as several commitments, for which loan loss provisions had been made, had performed more positively than originally expected.
The 14.9 per cent increase in the bank's administrative expenses to €286.4 million is in line with strategic goals. Targeted investments are being made in clearly defined growth areas. These involve an increase in the number of staff and higher costs for information technology. Success in business performance during 2005 led to a strong increase in performance-related remuneration. As a result of the significant increase in profits, the cost:income ratio was lowered to 60.8 per cent from 66.8 per cent in 2004.
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Full stock exchange announcement
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