HSBC's profits rose 10 percent last year, just below analysts' forecasts, as strong gains in Asia helped Europe's biggest bank absorb a US$17.2 billion hit for bad debts largely due to US housing problems.
The London-headquartered bank reported record pretax profit of US$24.2 billion last year, up from US$22.1 billion in 2006.
This was below an average forecast of US$24.7 billion from a Reuters Estimates poll of analysts, but well within the forecast range.
PHOTO: AFP
The bank's impairment charge jumped US$6.7 billion from 2006, or 63 percent.
Bad debts had been expected to come in at US$15.8 billion, based on the average of forecasts from eight analysts.
HSBC shares were up 0.6 percent at 770.5 pence, the top performing stock in a weak UK share market.
HSBC said that it had suffered an "exceptionally weak" performance in the US, hit by continued deterioration in the US subprime housing market, where it had been a major lender.
But the bank said it had produced "exceptionally strong" results in Asia-Pacific, Latin America and the Middle East.
"The outlook for the rest of 2008 is uncertain," bank chairman Stephen Green said, adding that the US economic slowdown and credit outlook "may well get worse."
But he said that HSBC's conservative balance sheet and international spread left it well positioned and it expects to improve margins and will "continue to invest in building market presence at a time when others with weaker capital positions are constrained."
The bank set new performance targets, including a return on equity of 15 percent to 19 percent over an investment cycle, a cost/efficiency ratio of 48 percent to 52 percent and total shareholder return in the top half of those achieved by its peers.
Profits at HSBC's investment banking arm, which has been renamed global banking and markets, rose 5 percent to US$6.1 billion on strong revenue growth in equities, foreign exchange and other areas.
The unit took a US$2.1 billion writedown on the value of complex financial assets that have been tarnished by the US subprime crisis and turmoil in financial markets.
The writedown was above previous estimates but less than the multibillion dollar hits take by many other banks.
In China, HSBC made profit of more than US$1 billion for the first time, through its own business and in conjunction with associates. Hong Kong profits topped US$7 billion.
The bank recommended a final dividend of US$0.39 per share, taking the full-year payout to US$0.90, up 11 percent from 2006.
US President Donald Trump yesterday announced sweeping "reciprocal tariffs" on US trading partners, including a 32 percent tax on goods from Taiwan that is set to take effect on Wednesday. At a Rose Garden event, Trump declared a 10 percent baseline tax on imports from all countries, with the White House saying it would take effect on Saturday. Countries with larger trade surpluses with the US would face higher duties beginning on Wednesday, including Taiwan (32 percent), China (34 percent), Japan (24 percent), South Korea (25 percent), Vietnam (46 percent) and Thailand (36 percent). Canada and Mexico, the two largest US trading
AIR SUPPORT: The Ministry of National Defense thanked the US for the delivery, adding that it was an indicator of the White House’s commitment to the Taiwan Relations Act Deputy Minister of National Defense Po Horng-huei (柏鴻輝) and Representative to the US Alexander Yui on Friday attended a delivery ceremony for the first of Taiwan’s long-awaited 66 F-16C/D Block 70 jets at a Lockheed Martin Corp factory in Greenville, South Carolina. “We are so proud to be the global home of the F-16 and to support Taiwan’s air defense capabilities,” US Representative William Timmons wrote on X, alongside a photograph of Taiwanese and US officials at the event. The F-16C/D Block 70 jets Taiwan ordered have the same capabilities as aircraft that had been upgraded to F-16Vs. The batch of Lockheed Martin
GRIDLOCK: The National Fire Agency’s Special Search and Rescue team is on standby to travel to the countries to help out with the rescue effort A powerful earthquake rocked Myanmar and neighboring Thailand yesterday, killing at least three people in Bangkok and burying dozens when a high-rise building under construction collapsed. Footage shared on social media from Myanmar’s second-largest city showed widespread destruction, raising fears that many were trapped under the rubble or killed. The magnitude 7.7 earthquake, with an epicenter near Mandalay in Myanmar, struck at midday and was followed by a strong magnitude 6.4 aftershock. The extent of death, injury and destruction — especially in Myanmar, which is embroiled in a civil war and where information is tightly controlled at the best of times —
China's military today said it began joint army, navy and rocket force exercises around Taiwan to "serve as a stern warning and powerful deterrent against Taiwanese independence," calling President William Lai (賴清德) a "parasite." The exercises come after Lai called Beijing a "foreign hostile force" last month. More than 10 Chinese military ships approached close to Taiwan's 24 nautical mile (44.4km) contiguous zone this morning and Taiwan sent its own warships to respond, two senior Taiwanese officials said. Taiwan has not yet detected any live fire by the Chinese military so far, one of the officials said. The drills took place after US Secretary
RSS