Pre-tax profit at HSBC Bank Malaysia Berhad for the nine months ending September 30th was 18.6 per cent higher than in the corresponding period last year.
Profit before tax for the period rose to MYR 1,193m [Malaysia Ringgit] (£242.27m), MYR 187m (£37.98m) more than in the same period in 2011.
Operating income grew to MYR 2,267m (£460.45), an increase of 9% compared to the corresponding nine months in 2011. This was mainly due to higher income from Islamic banking operations of MYR425m (£86.30) and increase in net interest income.
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Growing demand for Islamic banking
The robust growth rate in income from Islamic Banking Operations was driven by strong growth in net financing income and Islamic trading profits. The strong momentum and interest in Islamic Banking in the local and international financial industry, coupled with the bank's investments in domestic network coverage, supported the expansion of Islamic income.
Net interest income grew because the size of the average loan and financing base increased and net fee income improved from increased corporate finance related fees.
Loan impairment charges and other credit risk provisions increased marginally by MTYR6m (£1.22m). The cost efficiency ratio for the nine months ending September 30th improved to 39.7% from 43.3% for the same period in 2011.
Total assets at September 30th were MYR77.6bn (£15.76bn), slightly lower than the MYR79.9bn (£16.22bn) at December 31st 2011. The bank said that the decrease was mainly due to lower deposits and placements from banks and financial institutions.
Mukhtar Hussain, Deputy Chairman and Chief Executive Officer of HSBC Bank Malaysia Berhad, commented: "We recorded a strong increase of MYR187m, or 18.6%, in profit before tax for the first nine months of 2012 by continuing to expand our Malaysian business, and the prudent management of overheads, which created organic growth across all business lines.
"Malaysia's GDP growth for 2012 continues to be spurred by robust domestic and private consumption, effectively mitigating against negative spillovers from weaknesses in the external environment. The government's efforts through the Economic Transformation Programme as well as the Government Transformation Programme have contributed to sustainable economic growth within the country.
"We continue to remain optimistic about the Bank's prospects in Malaysia and are committed to investing and contributing positively towards the economic and financial development of the country."
HSBC Group has a market capitalisation of £118,801m. The share price was down 0.28% to 2,481p at 09:25 on Wednesday morning.
MF
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