HSBC Bank Canada Second Quarter 2023 Results

VANCOUVER, British Columbia--(BUSINESS WIRE)--Linda Seymour, President and Chief Executive Officer of HSBC Bank Canada¹, said:

“Performance remained robust in the second quarter of 2023 continuing the trends that we saw in the first quarter of the year. Profit before tax was 53% higher than in the second quarter of 2022 – with three of our four business segments seeing improved revenues and profits – largely due to increased net interest income from improved margins and loan growth, as well as lower expected credit losses compared to a significant write off in the prior year. This was partly offset by an increase in operating expenses, primarily related to the agreed sale² of the bank.

“The Canadian economy, and our clients, have remained resilient in the face of significant challenges posed by inflation, interest rates and labour related disruptions to trade flows. Thank you to our teams for remaining focused on supporting our clients through these continuing economic headwinds.”

Highlights³ financial performance (2Q23 vs 2Q22)

• Profit before income tax expense was $302m, up $104m or 53%. All business segments were profitable with increases in profit before tax expense and total operating income across three of our four business segments.
• Total operating income remains strong at $681m, up $82m or 14%, largely due to improved net interest margins with continued growth in lending, higher trading income and increased client activity in cards. While challenging market conditions drove a modest decrease in net fee income.
• Change in expected credit losses ('ECL') was a charge of $13m primarily driven by new defaults in non-performing loans and the impact of rising interest rates on the mortgage portfolio, partly offset by a release in performing loans due to a relative improvement in forward-looking macro-economic variables.
• Total operating expenses were up by $47m or 15% mainly due to costs related to the agreed sale² of HSBC Bank Canada, partly offset by lower investment spend in 2023.

Highlights³ financial performance (H1 23 vs H1 22)

• Profit before income tax expense was $611m, up $121m or 25% with operating income, up $189m or 16%, and a lower charge in ECL. Total operating expenses were up $93m or 15%.
• All business segments were profitable with increases in profit before tax expense and total operating income across three of our four business segments.
• Total assets were $121.1bn, down $7.2bn or 5.6%, from 31 December 2022.
• Common equity tier 1 capital ratio⁴ of 12.8%, up 120 bps from 31 December 2022.
• Return on average common equity⁵ of 16.0%, up 270 bps from 31 December 2022.

1. HSBC Bank Canada and its subsidiary undertakings (together ‘the bank’, ‘we’, ‘our’) is an indirectly wholly-owned subsidiary of HSBC Holdings plc (‘HSBC Holdings’). Throughout the document, HSBC Holdings is defined as the ‘HSBC Group’ or the ‘Group’.
2. On 29 November 2022, HSBC Group announced an agreement to sell its 100% equity stake in HSBC Bank Canada to Royal Bank of Canada (‘RBC’). For further information, refer to the 'Agreed sale of HSBC Bank Canada' section of this document.
3. For the quarter and half-year ended 30 June 2023 compared with the same periods in the prior year (unless otherwise stated). The abbreviations ‘$m’ and ‘$bn’ represent millions and billions of Canadian dollars, respectively.
4. Capital ratios and risk weighted assets are calculated using the Office of the Superintendent of Financial Institutions Canada's ('OSFI') Capital Adequacy Requirements ('CAR') guideline, and the Leverage ratio is calculated using OSFI’s Leverage Requirements ('LR') guideline. The CAR and LR guidelines are based on the Basel III guidelines.
5. In evaluating our performance, we use supplementary financial measures which have been calculated from International Financial Reporting Standards ('IFRS') figures. For further information on these financial measures refer to the ‘Use of supplementary financial measures’ section of this document.

 Analysis of consolidated financial results for the second quarter ended 30 June 2023¹

Net interest income was $442m for the quarter, an increase of $73m or 20%, and $894m for the half-year, an increase of $188m or 27%. This was due to the impact of the central bank rate increases over the past year and average loans and advances to customers increasing compared to the second quarter of 2022, partly offset by changes in deposit mix.

Net fee income was $194m for the quarter, a slight decrease of $2m or 1% as challenging market conditions resulted in lower fees on investment funds under management in Wealth and Personal Banking. Lower volumes in remittances and guarantees also contributed to the decrease. These decreases were partly offset by increased activity in cards and increased transactions in account services resulting in an increase in net fee income.

For the half-year, net fee income was $383m, a decrease of $10m or 2.5% driven by the same factors as in the quarter, coupled with lower underwriting fees in Global Banking offset by higher credit facility fees from higher volumes of bankers’ acceptances in Commercial Banking.

Net income from financial instruments held for trading was $40m for the quarter, an increase of $16m or 67%, and $67m for the half-year, an increase of $16m or 31%. The increase was mainly from a favourable change in cash flow hedge instruments and higher income from trading activities compared to the adverse movement in the value of a loan syndication facility in the prior year. Net interest income from trading activities increased due to the higher interest rate environment. These increases were partly offset by lower favourable movements in credit and funding fair valuation adjustments compared to the prior year.

The change in ECL for the quarter resulted in a charge of $13m primarily driven by new defaults in non-performing loans and the impact of rising interest rates on the mortgage portfolio, partly offset by a release in performing loans due to a relative improvement in forward-looking macro-economic variables. This compares to a charge in 2022 of $82m primarily driven by the write-off of a material stage 3 loan, coupled with a charge in performing loans driven by an adverse shift in forward-looking macro-economic variables at that time.

ECL for the half-year resulted in a charge of $15m compared to a charge of $40m in 2022. The charge for the half-year was driven by the same factors in the quarter. In 2022, the ECL was driven by a significant charge for a material stage 3 loan, partly offset by a release in performing loans during the first quarter of 2022 for COVID-19 related allowances.

Total operating expenses were $366m for quarter, an increase of $47m or 15%, and $732m for the half-year, an increase of $93m or 15%. The increase for both the quarter and half-year was mainly due to costs relating to the agreed sale² of HSBC Bank Canada which includes the re-assessment of the useful life and impairment of intangible assets. Higher staff-related costs, also contributed to the increase. This was partly offset by lower investment spend in 2023.

Income tax expense: the effective tax rate for the second quarter of 2023 was 28.0%. The statutory tax rate was 27.8% which incorporates the additional tax on banks and life insurance groups announced in April 2022. Compared to the statutory rate, there has been a nominal increase in tax liabilities. The effective tax rate for the second quarter of 2022 was 26.7%.

1. For the quarter and half-year ended 30 June 2023 compared with the same periods in the prior year (unless otherwise stated).
2. On 29 November 2022, HSBC Group announced an agreement to sell its 100% equity stake in HSBC Bank Canada to Royal Bank of Canada (‘RBC’). For further information, refer to the 'Agreed sale of HSBC Bank Canada' section of this document.

Dividends

Dividends declared in the second quarter 2023

During the second quarter of 2023, the bank declared regular quarterly dividends of $19m on all series of outstanding HSBC Bank Canada Class 1 preferred shares and paid such dividends in accordance with their terms. No dividends were declared or paid on HSBC Bank Canada common shares during the second quarter of 2023.

Dividends declared in the third quarter 2023

On 27 July 2023, the bank declared regular quarterly dividends for the third quarter of 2023 on all series of outstanding HSBC Bank Canada Class 1 preferred shares, to be paid in accordance with their terms in the usual manner on 30 September 2023 or the first business day thereafter to the shareholder of record on 15 September 2023.

As the quarterly dividends on preferred shares for the third quarter of 2023 were declared after 30 June 2023, the amounts have not been included in the balance sheet as a liability. At this time, no dividends have been declared on HSBC Bank Canada common shares during the third quarter.

Business performance in the second quarter ended 30 June 2023¹

Commercial Banking ('CMB')

Profit before income tax expense for the quarter was $195m, an increase of $79m or 68% and $402m for the half-year, an increase of $69m or 21% as charges in expected credit losses decreased compared to the prior year and operating income increased.

Total operating income for the quarter was $311m, an increase of $18m or 6.1% and $621m for the half-year, an increase of $48m or 8.4%. CMB has maintained positive momentum in 2023 with average loan balances increasing by $3.4bn or 10% and average deposit balances increasing by $2.0bn or 7.7% compared to the first half of 2022. Net interest income improved due to the impact of the central bank rate increases over the past year and higher average loan volumes. Non-interest income has similarly improved with higher volumes of bankers’ acceptances and increased activity in corporate credit cards.

Wealth and Personal Banking ('WPB')

We had record² profit before income tax expense for the quarter and half-year. Profit before income tax expense for the quarter was $111m, an increase of $46m or 71% and $209m for the half-year, an increase of $84m or 67%. The increase was driven by higher operating income, partly offset by an unfavourable change in expected credit losses and higher operating expenses.

Total operating income for the quarter was $295m, an increase of $63m or 27%. Total operating income for the half-year was $576m, an increase of $127m or 28%. The increase was driven by improved margins as a result of the central bank rate increases over the past year, growth in average deposit balances and higher income from our online brokerage business, partly offset by lower investment funds under management and changes in product mix.

Global Banking ('GB')

Profit before income tax expense for the quarter was $36m, an increase of $21m or 140% and $75m for the half-year, an increase of $37m or 97% as a result of higher operating income and a favourable change in ECL.

Total operating income for the quarter was $49m, an increase of $10m or 26% and $109m for the half-year, an increase of $23m or 27%. Results from transaction banking activities remain strong, due mainly to higher spreads and higher income from trading activities compared to the adverse movement in the value of a loan syndication facility in the prior year. These increases were partly offset by lower revenues from capital markets reflecting, in part, slower client activity levels and challenging market conditions.

Markets and Securities Services ('MSS')

Profit before income tax expense for the quarter was $8m, a decrease of $10m or 56% and $17m for the half-year, a decrease of $14m or 45% mainly due to lower operating income.

Total operating income for the quarter was $20m, a decrease of $11m or 35% and $42m for the half-year, a decrease of $15m or 26%. The decrease was driven mainly from fixed income trading, partly offset by higher net interest income driven by the central bank rate increases over the past year.

Corporate Centre³

Profit before income tax expense for the quarter was a loss of $48m, compared to a loss of $16m in the prior year. Profit before income tax for the half-year was a loss of $92m, compared to a loss of $37m for the same period in the prior year. This was mainly due to increased costs relating to the agreed sale⁴ of HSBC Bank Canada which includes the re-assessment of the useful life and impairment of intangible assets. This was partly offset by lower investment spend in 2023 and higher non-interest income.

1. For the quarter and half-year ended 30 June 2023 compared with the same periods in the prior year (unless otherwise stated).
2. Record for the first quarter since inception of WPB as a single global business in 2011.
3. Corporate Centre is not an operating segment of the bank. The numbers included above provides a reconciliation between operating segments and the entity results.
4. On 29 November 2022, HSBC Group announced an agreement to sell its 100% equity stake in HSBC Bank Canada to Royal Bank of Canada (‘RBC’). For further information, refer to the 'Agreed sale of HSBC Bank Canada' section of this document.

In evaluating our performance, we use supplementary financial measures which have been calculated from International Financial Reporting Standards ('IFRS') figures. Following is a glossary of the relevant measures used throughout this document but not presented within the consolidated financial statements. The following supplementary financial measures include average balances and annualized income statement figures, as noted, are used throughout this document.

Return on average common shareholder’s equity is calculated as annualized profit attributable to the common shareholder for the period divided by average¹ common equity.

Return on average risk-weighted assets is calculated as the annualized profit before income tax expense divided by the average¹ risk-weighted assets.

Cost efficiency ratio is calculated as total operating expenses as a percentage of total operating income.

Operating leverage ratio is calculated as the difference between the rates of change for operating income and operating expenses.

Net interest margin is net interest income expressed as an annualized percentage of average¹ interest earning assets.

Change in expected credit losses to average gross loans and advances and acceptances is calculated as the annualized change in expected credit losses² as a percentage of average¹ gross loans and advances to customers and customers' liabilities under acceptances.

Change in expected credit losses on stage 3 loans and advances and acceptances to average gross loans and advances and acceptances is calculated as the annualized change in expected credit losses² on stage 3 assets as a percentage of average¹ gross loans and advances to customers and customers' liabilities under acceptances.

Total stage 3 allowance for expected credit losses to gross stage 3 loans and advances and acceptances is calculated as the total allowance for expected credit losses² relating to stage 3 loans and advances to customers and customers' liabilities under acceptances as a percentage of stage 3 loans and advances to customers and customers' liabilities under acceptances.

Net write-offs as a percentage of average customer advances and acceptances is calculated as annualized net write-offs as a percentage of average¹ net customer advances and customers' liabilities under acceptances.

Ratio of customer advances to customer accounts is calculated as loans and advances to customers as a percentage of customer accounts.

1. The net interest margin is calculated using daily average balances. All other financial measures use average balances that are calculated using quarter-end balances.
2. Change in expected credit losses relates primarily to loans, acceptances and commitments.

 

HSBC Bank Canada	Consolidated income statement (unaudited)
(Figures in $m, except where otherwise stated) Financial performance and position
	Quarter ended		Half-year ended
	30 Jun 2023	30 Jun 2022	30 Jun 2023	30 Jun 2022
Financial performance for the period
Total operating income	681	599	1,358	1,169
Profit before income tax expense	302	198	611	490
Profit attributable to the common shareholder	198	133	403	336
Change in expected credit losses and other credit impairment charges - (charge)	(13)	(82)	(15)	(40)
Operating expenses	(366)	(319)	(732)	(639)
Basic and diluted earnings per common share ($)	0.37	0.24	0.74	0.61
Financial ratios %^1
Return on average common shareholder’s equity	15.3	11.2	16.0	13.3
Return on average risk-weighted assets	2.7	1.9	2.8	2.4
Cost efficiency ratio	53.7	53.3	53.9	54.7
Operating leverage ratio^2	n/a	12.3	1.6	9.0
Net interest margin	1.62	1.37	1.64	1.32
Change in expected credit losses to average gross loans and advances and acceptances	0.07	0.43	0.04	0.11
Change in expected credit losses on stage 3 loans and advances and acceptances to average gross loans and advances and acceptances	0.21	0.35	0.12	0.18
Total stage 3 allowance for expected credit losses to gross stage 3 loans and advances and acceptances	29.9	27.9	29.9	27.9
Net write-offs as a percentage of average loans and advances and acceptances	—	0.67	0.02	0.35

Financial and capital measures
	At
	30 Jun 2023	31 Dec 2022
Financial position at period end
Total assets	121,146	128,302
Loans and advances to customers	73,956	74,862
Customer accounts	79,141	82,253
Ratio of customer advances to customer accounts (%)^1	93.4	91.0
Common shareholder’s equity	5,207	4,818
Capital, leverage and liquidity measures
Common equity tier 1 capital ratio (%)^3	12.8	11.6
Tier 1 ratio (%)^3	15.3	14.1
Total capital ratio (%)^3	17.6	16.4
Leverage ratio (%)^3	5.2	4.7
Risk-weighted assets ($m)^3	44,519	44,656
Liquidity coverage ratio (%)^4	161	164

Refer to the ‘Use of supplementary financial measures’ section of this document for a glossary of the measures used. n/a is shown where the ratio has resulted in a negative ratio. Capital ratios and risk weighted assets are calculated using the Office of the Superintendent of Financial Institutions Canada's ('OSFI') Capital Adequacy Requirements ('CAR') guideline, and the Leverage ratio is calculated using OSFI’s Leverage Requirements ('LR') guideline. The CAR and LR guidelines are based on the Basel III guidelines. The Liquidity coverage ratio is calculated using OSFI's Liquidity Adequacy Requirements ('LAR') guideline, which incorporates the Basel liquidity standards. The LCR in this table has been calculated using averages of the three month-end figures in the quarter.

HSBC Bank Canada	Consolidated income statement (unaudited)
(Figures in $m, except per share amounts)		Quarter ended		Half-year ended
		30 Jun 2023	30 Jun 2022	30 Jun 2023	30 Jun 2022
Interest income		1,291	630	2,547	1,101
Interest expense		(849)	(261)	(1,653)	(395)
Net interest income		442	369	894	706
Fee income		225	224	446	446
Fee expense		(31)	(28)	(63)	(53)
Net fee income		194	196	383	393
Net income from financial instruments held for trading		40	24	67	51
Changes in fair value of other financial instruments mandatorily measured at fair value through profit and loss		—	(1)	—	(1)
Gains less losses from financial investments		—	—	2	2
Other operating income		5	11	12	18
Total operating income		681	599	1,358	1,169
Change in expected credit losses and other credit impairment charges - (charge)		(13)	(82)	(15)	(40)
Net operating income		668	517	1,343	1,129
Employee compensation and benefits		(174)	(152)	(331)	(303)
General and administrative expenses		(144)	(138)	(294)	(280)
Depreciation and impairment of property, plant and equipment		(14)	(16)	(28)	(31)
Amortization and impairment of intangible assets		(34)	(13)	(79)	(25)
Total operating expenses		(366)	(319)	(732)	(639)
Profit before income tax expense		302	198	611	490
Income tax expense		(84)	(53)	(170)	(131)
Profit for the period		218	145	441	359
Profit attributable to the common shareholder		198	133	403	336
Profit attributable to the preferred shareholder		20	12	38	23
Profit attributable to shareholder		218	145	441	359
Average number of common shares outstanding (000’s)		548,668	548,668	548,668	548,668
Basic and diluted earnings per common share ($)		0.37	0.24	0.74	0.61

 

HSBC Bank Canada	Consolidated balance sheet (unaudited)
		At
(Figures in $m)		30 Jun 2023	31 Dec 2022
ASSETS
Cash and balances at central bank		4,682	6,326
Items in the course of collection from other banks		10	9
Trading assets		3,006	4,296
Other financial assets mandatorily measured at fair value through profit or loss		20	18
Derivatives		5,892	6,220
Loans and advances to banks		338	344
Loans and advances to customers		73,956	74,862
Reverse repurchase agreements – non-trading		4,303	6,003
Financial investments		23,050	23,400
Other assets		1,787	2,591
Prepayments and accrued income		326	351
Customers’ liability under acceptances		3,176	3,147
Current tax assets		113	172
Property, plant and equipment		342	332
Goodwill and intangible assets		81	160
Deferred tax assets		64	71
Total assets		121,146	128,302
LIABILITIES AND EQUITY
Liabilities
Deposits by banks		523	712
Customer accounts		79,141	82,253
Repurchase agreements – non-trading		4,789	4,435
Items in the course of transmission to other banks		233	227
Trading liabilities		2,517	3,732
Derivatives		6,424	6,575
Debt securities in issue		12,068	15,735
Other liabilities		3,615	3,577
Acceptances		3,181	3,156
Accruals and deferred income		972	713
Retirement benefit liabilities		209	203
Subordinated liabilities		1,011	1,011
Provisions		40	54
Current tax liabilities		115	—
Deferred tax liability		1	1
Total liabilities		114,839	122,384
Equity
Common shares		1,125	1,125
Preferred shares		1,100	1,100
Other reserves		(797)	(786)
Retained earnings		4,879	4,479
Total shareholder's equity		6,307	5,918
Total liabilities and equity		121,146	128,302

 

HSBC Bank Canada	Business segmentation (unaudited)
(Figures in $m)		Quarter ended		Half-year ended
		30 Jun 2023	30 Jun 2022	30 Jun 2023	30 Jun 2022
Commercial Banking
Net interest income		185	173	373	335
Non-interest income		126	120	248	238
Total operating income		311	293	621	573
Change in expected credit losses charges - (charge)		(8)	(77)	(2)	(37)
Net operating income		303	216	619	536
Total operating expenses		(108)	(100)	(217)	(203)
Profit before income tax expense		195	116	402	333
Wealth and Personal Banking
Net interest income		212	156	416	297
Non-interest income		83	76	160	152
Total operating income		295	232	576	449
Change in expected credit losses charges - (charge)		(12)	(4)	(19)	—
Net operating income		283	228	557	449
Total operating expenses		(172)	(163)	(348)	(324)
Profit before income tax expense		111	65	209	125
Global Banking
Net interest income		33	29	77	54
Non-interest income		16	10	32	32
Total operating income		49	39	109	86
Change in expected credit losses charges - release/(charge)		7	(1)	6	(3)
Net operating income		56	38	115	83
Total operating expenses		(20)	(23)	(40)	(45)
Profit before income tax expense		36	15	75	38
Markets and Securities Services
Net interest income		14	10	31	19
Non-interest income		6	21	11	38
Net operating income		20	31	42	57
Total operating expenses		(12)	(13)	(25)	(26)
Profit before income tax expense		8	18	17	31
Corporate Centre^1
Net interest income		(2)	1	(3)	1
Non-interest income		8	3	13	3
Net operating income		6	4	10	4
Total operating expenses		(54)	(20)	(102)	(41)
Profit/(loss) before income tax expense		(48)	(16)	(92)	(37)

Corporate Centre is not an operating segment of the bank. The numbers included above provides a reconciliation between operating segments and the entity results.

Agreed sale of HSBC Bank Canada¹

On 29 November 2022, the HSBC Group announced an agreement to sell its 100% equity stake in HSBC Bank Canada (and its subsidiaries) as well as subordinated debt held by the HSBC Group to Royal Bank of Canada (‘RBC’) for a purchase price of $13.5bn. Subject to regulatory and governmental review and approval, we expect the sale to complete in the first quarter of 2024 to ensure a smooth transition.

The sale agreement follows a strategic review of HSBC Bank Canada by the HSBC Group. The review considered HSBC Bank Canada’s relatively low market share and the Group’s ability to invest in HSBC Bank Canada’s expansion and growth in the context of opportunities in other markets, and concluded that the best course of action strategically for the HSBC Group and HSBC Bank Canada was to sell the business.

1. HSBC Bank Canada and its subsidiary undertakings is an indirectly wholly-owned subsidiary of HSBC Holdings plc (‘the parent’, ‘HSBC Holdings’). HSBC Group means the parent and its subsidiary companies.

About HSBC Bank Canada

HSBC Bank Canada, a subsidiary of HSBC Holdings plc, is the leading international bank in the country. We help companies and individuals across Canada to do business and manage their finances here and internationally through four businesses: Commercial Banking, Wealth and Personal Banking, Global Banking, and Markets and Securities Services.

HSBC Holdings plc, the parent company of HSBC Bank Canada, is headquartered in London, United Kingdom. HSBC serves customers worldwide from offices in 62 countries and territories. With assets of US$3,041bn at 30 June 2023, HSBC is one of the world’s largest banking and financial services organizations.

For more information visit www.hsbc.ca or follow us on Twitter: @HSBC_CA or Facebook: @HSBCCanada

Caution regarding forward-looking statements

This document contains forward-looking information, including statements regarding the business and anticipated actions of the bank. These statements can be identified by the fact that they do not pertain strictly to historical or current facts. Forward-looking statements often include words such as 'anticipates', 'estimates', 'expects', 'projects', 'intends', 'plans', 'believes' and words and terms of similar substance in connection with discussions of future operating or financial performance. By their very nature, these statements require us to make a number of assumptions and are subject to a number of inherent risks and uncertainties that may cause actual results to differ materially from those contemplated by the forward-looking statements. We caution you to not place undue reliance on these statements as a number of risk factors could cause our actual results to differ materially from the expectations expressed in such forward-looking statements. The 'Risk' section in the Management's Discussion and Analysis in our Annual Report and Accounts 2022 describes the most significant risks to which the bank is exposed and, if not managed appropriately, could have a material impact on our future financial results. These risk factors include: credit risk, treasury risk (inclusive of capital management, liquidity and funding risk and interest rate risk), market risk, resilience risk, climate risk (inclusive of transition and physical risk impacts), regulatory compliance risk, financial crime risk, model risk and pension risk. Additional factors that may cause our actual results to differ materially from the expectations expressed in such forward-looking statements include: general economic and market conditions, inflation, fiscal and monetary policies, changes in laws, regulations and approach to supervision, level of competition and disruptive technology, cyber threat and unauthorized access to systems, changes to our credit rating, interbank offered rate ('IBOR') including Canadian Dollar Offered Rate ('CDOR') transition, and other risks such as changes in accounting standards, changes in tax rates, tax law and policy, and its interpretation of tax authorities, risk of fraud by employees or others, unauthorized transactions by employees and human error. Furthermore, on 29 November 2022, HSBC Group announced an agreement to sell its 100% equity stake in HSBC Bank Canada (and its subsidiaries) as well as subordinated debt held by HSBC Group to Royal Bank of Canada (‘RBC’). Subject to regulatory and governmental review and approval, we expect the sale to complete in the first quarter of 2024 to ensure a smooth transition. Risks relating to the effective migration and transition of HSBC Bank Canada’s customers, data, systems, processes and people to RBC will be managed through our established risk management programs and processes. Our success in delivering our strategic priorities and proactively managing the regulatory environment depends on the development and retention of our leadership and high-performing employees. The ability to continue to attract, develop and retain competent individuals in the highly competitive and active employment market continues to prove challenging. Despite contingency plans we have in place for resilience in the event of sustained and significant operational disruption, our ability to conduct business may be adversely affected by disruption in the infrastructure that supports both our operations and the communities in which we do business, including but not limited to disruption caused by public health emergencies, pandemics, environmental disasters, terrorist acts and geopolitical events. Refer to the ‘Factors that may affect future results’ section of the Management's Discussion and Analysis in our Annual Report and Accounts 2022 for a description of these risk factors. We caution you that the risk factors disclosed above are not exhaustive, and there could be other uncertainties and potential risk factors not considered here which may adversely affect our results and financial condition. Any forward-looking statements in this document speak only as of the date of this document. We do not undertake any obligation to, and expressly disclaim any obligation to, update or alter our forward-looking statements, whether as a result of new information, subsequent events or otherwise, except as required under applicable securities legislation.