02/23/2015 07:35 EST | Updated 04/25/2015 05:59 EDT

HSBC Bank Canada reports Q4 profit lower due to low interest rates,

VANCOUVER - HSBC's Canadian subsidiary says its fourth-quarter profit was lower last year than in 2013 because of less income from consumer lending, higher operating expenses and a smaller share of profit from associated companies.

Vancouver-based HSBC Bank Canada — a subsidiary of Europe's largest bank — said it had C$118 million in net income attributable to common shareholders in the fourth quarter, down 28 per cent from a year earlier.

Excluding income tax, HSBC Canada's fourth-quarter profit was down 11.2 per cent from a year earlier to $206 million.

Net interest income for the quarter was $295 million, down $21 million or seven per cent from a year earlier. Its share of profit in associates dropped to $2 million, down $15 million or 88 per cent from a year earlier. Total operating expenses increased to three per cent or $8 million to $278 million.

On the positive side, HSBC Canada said it had increased fee income from credit and wealth management was up $18 million or 12 per cent to $169 million, while trading income was $39 million, up $5 million or 15 per cent.

Total assets under management as of Dec. 31 was $88.2 billion, up $3.9 billion from a year earlier.

The company's London-based parent, which is a global bank, saw its full-year net income drop by 16 per cent to $13.7 billion amid geopolitical headwinds and consolidation in the group.

HSBC chief executive officer Stuart Gulliver acknowledged Monday that 2014 profits disappointed, but said a tough fourth quarter "masked some of the progress made over the preceding three quarters."

The disappointing results come as HSBC is being pummelled by allegations that its Swiss private bank helped the wealthy evade taxes.

HSBC chairman Douglas Flint insisted the bank had cleaned up past behaviour and said the Swiss allegations "remind us of how much there still is to do and how far society's expectations have changed in terms of banks' responsibilities."