FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of April 2006
HSBC Holdings plc
42nd Floor, 8 Canada
Square, London E14 5HQ, England
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F).
Form 20-F X Form 40-F ......
(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934).
Yes....... No X
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- ..............)
The following text is the English translation of a news release issued in
Germany by HSBC Holdings plc's subsidiary.
HSBC TRINKAUS & BURKHARDT KGaA 2005 RESULTS
- Profit before tax up 59.1 per cent to EUR194.4 million; profit after tax
up 50.4 per cent to EUR117.9 million.
- Operating profit up 33.4 per cent to EUR137.4 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 EUR11.4 billion to EUR19.9 billion.
- Highest profits in HSBC Trinkaus & Burkhardt's history.
HSBC Trinkaus & Burkhardt's operating profit increased by 33.4 per cent to
EUR137.4 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 EUR11.4 billion in 2004 to EUR19.9
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 EUR41.8 billion to EUR62.8 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 EUR226.4 million to EUR264.4 million. Net
interest income rose by 7.6 per cent from EUR69.3 million to EUR74.6 million.
Trading profits advanced by 36.6 per cent from EUR54.4 million to EUR74.3
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 EUR286.4
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.
There was a structural change in administrative expenses in 2005 chiefly as a
result of two items. First, the launch of International Transaction Services
GmbH (ITS) as a joint venture with T-Systems International GmbH. Higher
administrative expenses were incurred with the establishment of the company and
during the start-up phase. There was, however, some decline in reported
administrative expenses once the net results of ITS were reported as income from
joint ventures. Second, selected financial investments and pension liabilities
were transferred to a Contractual Trust Arrangement (CTA). The expenses
resulting from the obligations are set off against the income from the assets
transferred according to International Financial Reporting Standards.
Both events and the sale of financial investments resulted in high extraordinary
income in 2005. This led to an even stronger increase in net income for the year
than in operating profit. Profit before tax increased 59.1 per cent from
EUR122.2 million to EUR194.4 million. Profit after tax increased 50.4 per cent
from EUR78.4 million to EUR117.9 million - the best result in Trinkaus &
Burkhardt's history. Return on equity improved from 19.5 per cent to 30.6 per
cent before tax and from 12.5 per cent to 18.5 per cent after tax. An increase
in shareholder dividend to EUR2.50 from EUR2.25 for 2004, will be proposed at
the bank's annual shareholders' meeting on 30 May 2006.
In 2005, there was a strong increase in consolidated assets of 19.7 per cent to
EUR16.0 billion. The increase in risk assets and in market risk positions as
defined by the German Banking Act (Kreditwesengesetz) led to a slight decline in
the total capital ratio from 12.5 per cent to 11.5 per cent and in the core
capital ratio from 8.2 per cent to 7.3 per cent. The bank's capital resources
remain strong.
As already announced at the end of 2005, HSBC has increased its stake in HSBC
Trinkaus & Burkhardt. HSBC now holds 78.6 per cent from 73.5 per cent at the end
of 2004. The stake held by Landesbank Baden-Wurttemberg remains unchanged at
20.3 per cent.
There was a strong increase in profit in the private banking division during
2005. Pre-tax profits increased by 25.1 per cent from EUR30.7 million to EUR38.4
million. This increase is particularly notable as last year's results included
an exceptional gain of EUR6.3 million from the sale of shares in HSBC
Guyerzeller Bank in 2004. The improvement in earnings of our private banking
division was the result of significant business expansion in the securities
business that included strong increases in volumes.
In the corporate banking division, net fees and commissions rose as a result of
a significant expansion of the client base and the bank's strengthening position
as 'core' bank for a large number of corporate clients. The earnings
contribution in this division rose by 7.7 per cent to EUR46.3 million.
The bank's institutional client segment operated very successfully, with
particular success in the structured products business and in asset management.
The sale of products from the HSBC Group contributed to the further increase in
this division's results. There was strong growth in the earnings contribution,
of 13.4 per cent to EUR50.7 million. In order to highlight the growing
cooperation with HSBC in the field of worldwide asset management services, the
subsidiary HSBC Trinkaus Capital Management GmbH has been renamed HSBC
Investments Deutschland GmbH in 2006.
The pace of growth of INKA Internationale Kapitalanlagegesellschaft mbH
accelerated again last year, after being very successful in 2003 and 2004. The
assets managed by the subsidiary in 269 (previous year 227) special and public
funds increased from EUR24.5 billion to EUR38.8 billion. As a custodian bank,
HSBC Trinkaus & Burkhardt offers the safekeeping of securities in many
countries. Assets under custody reached a high of EUR103.6 billion in 2005.
Proprietary trading benefited from the favourable market environment and was
able to record the highest increase in earnings in a year-on-year comparison.
Alongside the particularly successful equities derivatives trading activities,
fixed income and foreign exchange trading also reported significant increases in
revenues. Overall, the earnings contribution from the proprietary trading
segment more than doubled to EUR51.2 million from EUR25.1 million the previous
year.
HSBC Trinkaus & Burkhardt acted as lead manager in the debt capital market in
cooperation with HSBC in 74 issues with an aggregate volume of more than EUR26.6
billion. The bank's own issuance of warrants, certificates and bonds with
different structures led to more than a 20 per cent increase in the bank's own
issues from 9,354 to 11,305.
The bank's subsidiary ITS is one of the leading securities processing service
providers. In terms of transaction volume it is already the second-largest
provider in the German market. The ITS platform today is used by HSBC Trinkaus &
Burkhardt, S Broker, DAB bank and fimatex by boursorama. FondsServiceBank is to
be added to the ITS client list in 2006. By the end of 2007, HypoVereinsbank
will also outsource substantial parts of its securities processing in the
private clients business to ITS.
Together with the majority shareholder HSBC, the managing partners of HSBC
Trinkaus & Burkhardt have decided to propose to the annual shareholders' meeting
on 30 May 2006 the conversion of the legal form of the bank from a partnership
limited by shares (KGaA) to a German Stock Corporation (AG). The new legal
structure will strengthen HSBC's commitment to HSBC Trinkaus & Burkhardt as a
strategic partner to grow the largest European bank's presence in the German
market. HSBC Trinkaus & Burkhardt's business model with its focus on corporate
and institutional clients, wealthy private banking clients and proprietary
trading remains unchanged. This will be emphasised by the appointment of the
managing partners as members of the future board whose objective is to further
expand operations in Germany. The partners believe that by changing the legal
form of the bank, the links between HSBC and HSBC Trinkaus & Burkhardt will be
reinforced and new forward-looking opportunities will be created for clients as
well as employees.
The managing partners of HSBC Trinkaus & Burkhardt are optimistic about the
bank's performance in 2006 and will pursue the goal of further increasing the
bank's operating profit during the year. This goal is subject to a strong upward
trend in stock market turnover and risk provisioning costs in line with the
levels seen in previous years.
Consolidated figures according to International Financial Reporting Standards
1. Balance sheet (EUR m) 2005 2004 %change
Loans and advances to
customers 2,554.0 2,636.7 (3.1)
Financial assets held
for trading 6,470.6 6,215.6 4.1
Customer accounts 7,139.6 5,927.1 20.5
Financial liabilities held
for trading 5,883.9 4,956.4 18.7
Equity capital 844.5 787.5 7.2
Total assets 15,951.4 13,323.1 19.7
2. Profit and loss account (EUR m)
Net interest income 74.6 69.3 7.6
Risk provisions (9.7) 1.6 -
Net fees and commissions 264.4 226.4 16.8
Trading profit 74.3 54.4 36.6
Trading administrative expenses 286.4 249.3 14.9
Operating profit 137.4 103.0 33.4
Profit before tax 194.4 122.2 59.1
Profit after tax 117.9 78.4 50.4
3. Other key figures
Pre-tax return on equity (%) 30.6 19.5 -
Cost:income ratio of
ordinary activities (%) 60.8 66.8 -
Funds under management
and administration (EUR bn) 62.8 41.8 50.2
Capital ratio according to
Kreditwesengesetz (KWG)(%) 11.5 12.5 -
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HSBC Holdings plc
By:
Name: P A Stafford
Title: Assistant Group Secretary
Date: 07 April 2006