HSBC Bank Canada reported lower net income for the third quarter as losses in its consumer finance business offset higher revenues from core banking and capital market activities.

The bank reported Wednesday that net income attributable to common shares for the quarter ended September 30 was $101 million, a drop of 15.8% compared to $120 million in the same quarter in 2008.

HSBC said its consumer finance business incurred a net loss attributable to common shares of $10 million in the third quarter, compared to a net loss of $1 million for the same quarter of 2008.

Commenting on the results, Lindsay Gordon, president and CEO of HSBC Bank Canada, stated:

“Thanks to higher revenues from core banking and capital market activities, continued tight cost control and a fall in quarterly credit losses, HSBC Bank Canada has delivered improved underlying quarterly results through the year to date. Overall results were down compared to the same quarter in 2008 primarily due to a reduction in net interest margin and the second quarter of 2009 primarily as a result of a write down of a portion of our non-bank Asset Backed Commercial Paper portfolio both caused by market factors.”

Return on average common equity, a measure of profitability, was 11.8% for the quarter compared with 13.6% a year ago.

Total assets were $71.6 billion at the quarter’s end compared with $71.5 billion last year.

Total funds under management increased to $27.0 billion at Sept. 30, compared with $24.6 billion a year ago.

The bank’s Tier 1 capital ratio was 11.7% during the quarter compared to 10.6% in the year earlier period.

IE