LONDON, Feb 27 – HSBC Holdings, Europe’s biggest bank, made a US$21.9 billion (RM66 billion) profit last year, the largest among western banks, as its strength in Asia helped it cope with a euro zone debt crisis that has plunged many rivals into huge losses.
HSBC, which makes more than three quarters of its pretax profit outside Europe and north America, said today it expected Asia, Latin American and Middle Eastern markets to continue growing strongly in 2012, albeit more moderately than in 2011.
Banks across Europe have been posting billions of dollars of losses as the euro zone sovereign debt crisis has eroded the value of their government bond holdings and hit their trading operations, and as they strive to meet tough new rules at preventing a repeat of the 2007-09 banking crisis.
HSBC, with around 7,200 offices in 80 countries, said pretax profit rose 15 per cent, just below analysts’ average forecast of US$22.2 billion in a Reuters poll.
The figure fell short of the group’s record profit of US$24.2 billion in 2007, but beats all other western banks that have reported so far for last year, including US rival J.P. Morgan , which made a US$19 billion profit.
The world’s most profitable banks in recent years have been China’s ICBC, which made US$32 billion in 2010, and China Construction Bank, which made US$26.4 billion.
HSBC’s profits were boosted by US$3.9 billion of gains on the value of its debt.
Stripping that out, underlying pretax profit fell 6 per cent to US$17.7 billion, due in part to rising wages in emerging markets and to restructuring costs.
Chief Executive Stuart Gulliver is reshaping HSBC to cut annual costs by US$3.5 billion, lift profitability and sharpen its focus on Asia, and he said he will step up the execution of his plan this year.
At 0840 GMT, HSBC shares in London were up 0.5 per cent at 577.3 pence, outperforming a 0.6 per cent drop on the UK’s benchmark FTSE 100 index.
HSBC said profits at its investment bank fell 24 per cent to US$7 billion, hurt as the euro zone debt crisis slowed capital markets activity in the second half of last year.
However, loan impairment charges and other credit risk-related provisions fell US$1.9 billion to US$12.1 billion. – Reuters