HSBC posts huge rise in profit
(29 February 2012 – Global) HSBC posted a US$17.9 billion (A$16.6 billion) profit for the past calendar year, up from US$14.2 billion in 2010.
The result was powered by a 12 percent jump in revenue in Asia, South America and the Middle East. Combined, they now make up half of HSBC's revenue base.
Chief executive Stuart Gulliver said surges in staff costs, especially in the fast-growing regions of Asia was likely to persist for the next few years, impacting on the bottom line.
The London-based HSBC, which ranks as Europe's biggest bank, plans to sharpen its focus on Asia, particularly in commercial and business banking as it tries to increase earnings outside sluggish European and North American markets.
Pre-tax profit in Hong Kong, its biggest single Asian market, rose 5 percent to US$5.8 billion. In the rest of the Asia-Pacific region, profit jumped 23 percent to US$7.4 billion. Pre-tax profit in Europe fell 61 percent to US$1.7 billion, mostly on write-downs on the value of euro-zone government bonds.
After years of pressure, the bank reported that lending margins were on the rebound through Asia. This was helped by improved pricing power across most regions outside the highly competitive Hong Kong market.
But Gulliver said wage pressure, mostly in Hong Kong, China and India, and through the Asia-Pacific, was largely behind a 10 percent jump in group-wide costs.
'We're not the only people to work out the emerging markets have high GDP growth and there's a limited pool of talent,' he said.
Gulliver is part way through a restructuring of HSBC to cut annual costs by $US3.5 billion and sharpen the bank's focus on Asia.
Pretax profit from HSBC's commercial banking arm rose 36 percent to a record US$7.9 billion, the lender said. Earnings from retail banking and wealth management advanced 19.6 percent to US$4.3 billion. HSBC expects Asia, Latin American and Middle Eastern markets to continue growing strongly in 2012, albeit more moderately than in 2011.
Gulliver warned the UK economy 'will be tough' over the coming year with growth at best likely to come in at 0.5 percent. The comments come as National Australia Bank has launched a review of its British banking arm, which could lead to an exit from that market.
Chief executive Stuart Gulliver said surges in staff costs, especially in the fast-growing regions of Asia was likely to persist for the next few years, impacting on the bottom line.
The London-based HSBC, which ranks as Europe's biggest bank, plans to sharpen its focus on Asia, particularly in commercial and business banking as it tries to increase earnings outside sluggish European and North American markets.
Pre-tax profit in Hong Kong, its biggest single Asian market, rose 5 percent to US$5.8 billion. In the rest of the Asia-Pacific region, profit jumped 23 percent to US$7.4 billion. Pre-tax profit in Europe fell 61 percent to US$1.7 billion, mostly on write-downs on the value of euro-zone government bonds.
After years of pressure, the bank reported that lending margins were on the rebound through Asia. This was helped by improved pricing power across most regions outside the highly competitive Hong Kong market.
But Gulliver said wage pressure, mostly in Hong Kong, China and India, and through the Asia-Pacific, was largely behind a 10 percent jump in group-wide costs.
'We're not the only people to work out the emerging markets have high GDP growth and there's a limited pool of talent,' he said.
Gulliver is part way through a restructuring of HSBC to cut annual costs by $US3.5 billion and sharpen the bank's focus on Asia.
Pretax profit from HSBC's commercial banking arm rose 36 percent to a record US$7.9 billion, the lender said. Earnings from retail banking and wealth management advanced 19.6 percent to US$4.3 billion. HSBC expects Asia, Latin American and Middle Eastern markets to continue growing strongly in 2012, albeit more moderately than in 2011.
Gulliver warned the UK economy 'will be tough' over the coming year with growth at best likely to come in at 0.5 percent. The comments come as National Australia Bank has launched a review of its British banking arm, which could lead to an exit from that market.
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