HSBC Sri Lanka
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The Hongkong and Shanghai Banking Corporation Limited Incorporated in the Hong Kong SAR with limited liability Sri Lanka Branch Main Office - 24, Sir Baron Jayatilaka Mawatha, Colombo 1. Summarised Income Statement Statement of Comprehensive Income Statement of Financial Position 2021 Audited 2020 For the period ended 31 March 2021 2020 For the period ended 31 March 2021 2020 As at 31 March As at 31 December Rs. ‘Mn Rs. ‘Mn Assets Rs. ‘Mn Rs. ‘Mn Rs. 'Mn Rs. 'Mn Cash and cash equivalents 19,467 20,412 Interest income 4,860 7,363 Profit/(loss) for the year 1,316 368 Balances with central bank 28,307 18,454 Placements with banks – – Interest expenses (1,669) (2,720) Items that will be reclassified to income statement Derivative financial instruments 709 656 Net interest income 3,191 4,643 Exchange differences on translation of foreign operations 2,827 1,873 Financial assets measured at fair value through profit or loss 431 335 Net gains/(losses) on cash flow hedges – – Financial assets designated at fair value through profit or loss – – Fee and commission income 1,130 945 Financial assets at amortised cost - loans and advances 231,195 219,123 Net gains/(losses) on investments in debt instruments measured at Fee and commission expenses (292) (320) Financial assets at amortised cost - debt instruments 3,113 3,118 fair value through other comprehensive income 371 (6,607) Financial assets measured at fair value through other 115,989 136,632 Net fee and commission income 838 625 Share of profits of associates and joint ventures – – comprehensive income Investments in subsidiaries – Net gains/(losses) from trading 968 (482) Debt instruments at fair value through other comprehensive income – – Investments in associates and joint ventures – Net fair value gains/(losses) on: Others – – Property, plant and equipment 4,835 4,836 Financial assets at fair value through profit or loss (5) 145 Less: Tax expense relating to items that will be reclassified to income statement (306) 1850 Investment properties – Goodwill and intangible assets – Financial liabilities at fair value through profit or loss – – 2,892 (2,884) Deferred tax assets – 368 Net gains/(losses) on derecognition of financial assets: Other assets 22,171 20,717 Items that will not be reclassified to profit or loss at fair value through profit or loss – – Total assets 426,217 424,651 at amortised cost – – Change in fair value on investments in equity instruments designated at Liabilities at fair value through other comprehensive income – – fair value through other comprehensive income – – Due to banks 73,497 88,302 Net other operating income 9 6 Change in fair value attributable to change in the Bank’s own credit risk on Derivative financial instruments 478 508 Total operating income 5,001 4,937 financial liabilities designated at fair value through profit or loss – – Financial liabilities measured at fair value through profit or loss – Financial liabilities designated at fair value through profit or loss – Re-measurement of post-employment benefit obligations – (8) Financial liabilities at amortised cost - due to depositors 248,244 237,258 Changes in revaluation surplus/(deficit) – – Impairment (charges)/reversals 470 (903) Financial liabilities at amortised cost - due to other borrowers – Share of profits of associates and joint ventures – – Due to subsidiaries – Net operating income 5,471 4,034 Retirement benefit obligations 238 246 Current tax liabilities 858 126 Less: Tax expense relating to items that will not be reclassified to income statement – – Personal expenses (944) (943) Deferred tax liabilities 197 – Other provisions – – – Depreciation and amortisation expenses (131) (174) Other liabilities 28,538 27,906 Other expenses (1,827) (1,868) Other comprehensive income for the period, net of taxes 2,892 (2,892) Total liabilities 352,050 354,346 Operating profit/(loss) before VAT and other taxes Equity Total comprehensive income for the period 4,208 (2,524) Stated capital/Assigned capital 3,152 3,152 on financial services 2,569 1,049 Attributable to: Statutory reserve fund 2,650 2,650 Retained earnings 48,533 47,213 Value added tax (VAT) on financial services (440) (250) Equity holders of the parent 4,208 (2,524) Other reserves 19,832 17,290 Total shareholders' equity 74,167 70,305 Non-controlling interests – – Other taxes on financial services (13) (2) Non-controlling interests – Total equity 74,167 70,305 Total equity and liabilities 426,217 424,651 Operating profit/(loss) after VAT and other taxes Contingent liabilities and commitments 509,379 530,834 on financial services 2,116 797 Selected Performance Indicators Memorandum information Share of profits of associates and joint ventures – – Audited Number of employees 1,033 1,020 2021 2020 Number of branches 13 13 As at 31 March As at 31 December Profit/(loss) before tax 2,116 797 Regulatory Capital Adequacy (LKR Millions) Analysis of loans and advances, commitments, contingencies and impairment 2021 Audited 2020 Common Equity Tier 1 62,859 62,385 Income tax expenses (800) (429) 31 March As at 31 December Core (Tier 1) Capital 62,859 62,385 Rs. 'Mn Rs.'Mn Profit/(loss) for the period 1,316 368 Product-wise gross loans and advances Total Capital Base 66,025 66,116 By product - Domestic Currency Regulatory Capital Ratios Overdrafts 14,917 17,737 Profit attributable to: Term loans 23,823 22,660 Equity holders of the parent 1,316 368 Common Equity Tier 1 Capital Ratio (Minimum Requirement, 7%) 19.83% 20.55% Lease rentals receivable – – 21,753 Non-controlling interests – – Tier 1 Capital Ratio (Minimum Requirement, 8.5%) 19.83% 20.55% Credit cards 21,420 Pawning – – Total Capital Ratio (Minimum Requirement, 12.5%) 20.83% 21.45% Other loans – 103 Statement of Cash Flows Sub total 60,493 61,920 2021 2020 By product - Foreign Currency 2021 Audited 2020 As at 31 March As at 31 December As at 31 March As at 31 December Overdrafts 14,979 14,226 Rs. ’Mn Rs. ’Mn Regulatory Liquidity Term loans 149,751 139,186 Guarantees – – Statutory Liquid Assets (LKR Millions) Bonds – – Cash flows from operating activities Other loans 8,622 6,724 Domestic banking unit 127,279 148,237 Sub total 173,352 160,136 Off-shore banking unit 29,879 29,940 Total 233,845 222,056 Interest receipts 5,330 26,343 Statutory Liquid Assets Ratio (Minimum Requirement, 20%) Interest payments (2,407) (8,653) 2021 Audited 2020 Domestic banking unit 55.39% 66.30% Product-wise commitments and contingencies 31 March As at 31 December Rs. 'Mn Rs.'Mn Net commission receipts 837 2,165 Off-shore banking unit 23.62% 23.19% By product - Domestic currency Trading income 963 1,092 Guarantees 17,669 19,370 Payments to employees (942) (3,862) Total Stock of High-Quality Liquid Assets (LKR Millions) Bonds 7,750 7,262 VAT on financial services (439) (748) Rupee 108,496 125,724 Undrawn credit lines 101,888 103,947 Foreign exchange contracts 39,202 62,825 Receipts from other operating activities 151 1,140 All currency 108,553 125,764 Other 583 182 Payments to other operating activities (1,797) (7,415) Liquidity Coverage Ratio Sub total 167,092 193,586 Operating profit before change in operating assets and liabilities 1,696 10,062 Rupee (Minimum Requirement - 100%) 333.09% 424.02% By product - Foreign Currency All currency (Minimum Requirement - 100%) 258.05% 316.12% Guarantees 52,530 58,732 (Increase)/decrease in operating assets Bonds 20,062 15,906 Balances with Central Bank of Sri Lanka (9,854) (8,713) Net Stable Funding Ratio - (Minimum Requirement - 100%) 130.45% 129.66% Undrawn credit lines 90,636 82,697 Foreign exchange contracts 134,571 147,610 Leverage ratio - (Minimum Requirement - 3%) 12.85% 12.26% Financial assets at amortised cost - loans and advances (7,535) 54,433 Other 44,488 32,303 Treasury bills & bonds 21,023 (25,040) Assets Quality (Quality of Loan Portfolio) Sub total 342,287 337,248 Total 509,379 530,834 Other assets 12,970 3,284 Gross Non-Performing Advances Ratio (net of interest in suspense) 0.76% 0.94% 16,604 23,964 2021 Audited 2020 Net Non-Performing Advances Ratio Stage-wise impairment on loans & advances 31 March 31 December Increase/(decrease) in operating liabilities Rs. 'Mn Rs. 'Mn (net of interest in suspense and provisions) 0.65% 0.83% Financial liabilities at amortised cost - due to depositors 10,986 27,452 Gross loans and advances 233,845 222,056 Profitability Financial liabilities at amortised cost - due to other borrowers (14,806) (82,298) Less: accumulated impairment under stage 1 (472) (589) Interest Margin 3.00% 3.73% accumulated impairment under stage 2 (1,091) (1,282) Other liabilities (18,191) 8,159 accumulated impairment under stage 3 (1,087) (1,062) Return on Assets (before tax) 1.99% 0.85% (22,011) (46,687) Net value of loans and advances 231,195 219,123 Return on Equity 7.10% 3.48% 2021 Audited 2020 Note: Profitability ratios are based on SLFRS data Movement of impairment during the period 31 March 31 December Net cash generated from operating activities before income tax (3,711) (12,661) Rs. 'Mn Rs. 'Mn Under stage 1 Analysis of Deposits Income tax paid 269 (2,212) Opening balance 589 661 Audited Charge/(write back) to income statement (131) (87) 2021 2020 Other movements 14 15 Net cash (used in)/from operating activities (3,442) (14,873) 31 March As at 31 December Rs. Mn Rs. Mn Closing balance 472 589 Cash flows from investing activities Purchase of property, plant & equipment (14) (234) Under stage 2 By product - Domestic Currency Opening balance 1,282 508 Proceeds from sale of property, plant & equipment – 25 Charge/(write back) to