Finance

Profits drop at HSBC Canada

By Felicity Stone /

HSBC business centre in Vancouver

THE#BCBIZDAILY
Plus, B.C. ranks third in Canada for venture capital deals and Kit and Ace lays off staff

Don’t bank on it
Low interest rates, the weak Canadian dollar and slumping oil prices have reduced profits at B.C.-based HSBC Bank Canada. The Canadian division of the global bank has reported profits before income tax for 2015 of $617 million, down by 32.3 per cent or $295 million compared with its 2014 results. Total assets at the end of 2015 were $94 billion, up from $88.2 billion at the end of 2014.

And HSBC isn’t the only Canadian bank affected by the economic downturn. A new report from Moody’s warns that increased losses connected to consumer loans and credit card debt plus the probability of default among energy companies could force some Canadian banks to cut dividends, among other measures.

On the bright side
Canadian venture capital and private equity activity increased substantially in 2015, according to a report from the Canadian Venture Capital & Private Equity Association. Most of the activity was in Ontario, Quebec and B.C.: 206 deals investing $939 million in Ontario, followed by 168 deals and $693 million invested in Quebec and 86 deals and $450 million invested in B.C.

Just under two-thirds of volume and transaction values involved IT companies, but health and life sciences increased 39 per cent in deal volume and 35 per cent in dollar terms compared to 2014. While a survey of CVCA members shows that 67 per cent feel depressed oil prices will worsen business outlooks for 2016, 64 per cent believe current economic conditions favour the private capital industry and 54 per cent that a lower Canadian dollar improves the business outlook for the upcoming year.

The right staff
Kit and Ace, the “technical cashmere” clothing line launched in 2014 by JJ and Shannon Wilson, son and wife of Lululemon founder Chip Wilson, has laid off 35 people in its Vancouver head office. The corporate restructuring leaves the company with around 600 employees worldwide, around half of which work at its headquarters in Vancouver.

The company told CBC News that it plans to expand and hire in other areas. According to Fortune, Kit and Ace is shifting its focus from opening new stores to building its brand and expanding its product lines. (via CBC)