(5 March 2008 – UK) HSBC has recorded an increase in profit last year coupled with an enormous provision for bad debt due to results from different parts of the world.The pre-tax profit for the year rose ten percent and was helped along the way by growth in Asia. The profit in 2007 reached $US24.2 billion, increasing from $US22.1 billion in the previous year.
Underlying profit growth was in line with forecasts, indicating that despite an uncertain market, the potential gains and losses by HSBC’s various divisions are becoming better understood.
Profit in Hong Kong jumped 42 percent, while for the rest of Asia the figure reached a substantial 70 percent. Due to the current credit crisis, the US arm of the largest European bank made a loss.
The bank, however, had to absorb $US17.2 billion in bad debts from the US sub prime crisis. This figure was over market expectations.
While the profit increase is testament to a diversified financial institution, HSBC have indicated that there is still much to do to ensure a strong outlook for 2008 and get the best out of the current market.