Source: The Canadian Press

HSBC Bank Canada, Canada’s biggest foreign-owned bank, reported a slight increase in net profits Thursday as the company booked sharply lower provisions for credit losses in an improving economy.

The Vancouver bank said it earned a net profit of $99 million or 17 cents a share for the three months ended March 31. That compared with earnings of $96 million or 17 cents a share in the same year-earlier period.

Total revenues in the quarter fell to $546 million from $627 million.

After payment of preferred share dividends, the bank said its net income applicable to common shareholders dropped to $84 million from $85 million.

In the fourth quarter of 2009, the bank earned $148 million, or 30 cents a share.

In a statement released early Thursday, HSBC Bank Canada said its good operating performance and lower loan impairment charges were masked by the impact of fair value accounting on its economic hedges, U.S.-dollar-denominated assets and liabilities and a portion of its own debt held at fair value.

The bank said this caused its first quarter results to book a non-cash charge of $112 million compared to credits of $35 million in the first quarter of 2009 and $8 million in the fourth quarter of 2009.

“Good operating performance for the first quarter of 2010 reflects increased revenues from core banking operations, positive results from our wealth management activities, stable costs and significant reductions in credit losses compared to prior periods,” Lindsay Gordon, HSBC Bank Canada president and CEO, said in a statement.

Provision for credit losses was $63 million for the first quarter, down from $161 million in the first quarter of 2009, when the recession was still hitting the Canadian economy.

HSBC Bank Canada, a subsidiary of HSBC Holdings plc, has more than 260 offices, including 140 bank branches, and is the biggest international bank in Canada.

Its British-Hong Kong-based parent is one of the world’s biggest banks, with operations in 88 countries and assets of US$2.4 trillion.