HSBC profits up 25 percent - new chief executive named
(Hong Kong) - Hong Kong and London listed banking giant, HSBC Holdings, has posted a 25 percent lift in net income to US$6.24 billion for the 2002 calendar year, despite a disappointing result in its core Hong Kong market.
The result, up from US$4.99 billion in 2001, was driven by a sharp decrease in bad loan provisions in Argentina, which were down by US$716 million year-on-year.
A 91 percent drop in charges also helped the bottom line, after HSBC took a US$520 million hit in 2001 from currency redenomination in Argentina, and a US$575 million charge arising from litigation over the acquisition of the late Edmund Safra's Republic New York Corp.
Pre-tax profits were $9.65 billion, slightly below analysts' expectations of $9.79 billion but up from $8.0 billion in 2001.
Group chairman Sir John Bond called 2002 "a testing year for the financial services industry" and said prospects for 2003 "are hard to predict."
Of most concern is the flat performance of the core Hong Kong unit, where the bank was hit by spiralling credit card defaults as a result of the ongoing local recession which has produced record high personal bankruptcies.
"The outlook for 2003 is characterised by the prospect of continuing deflation in Hong Kong, lack of demand for loans, and pressure on margins," the bank said.
"Across Asia, the uncertainties of the international situation will continue to constrain growth."
HSBC's main Asian operating unit reported net profit of HK$25.9 billion (US$3.32 billion), down from HK$26.24 billion in 2001.
The bank also named a new chief executive designate, Stephen Green, who is the current head of corporate and investment banking.
Green, 54, who has long been considered a front runner for the position, will step up on May 30 to succeed Sir Keith Whitson, 59, who is retiring after 42 years at the bank.
Sir John Bond, 61, remains chairman of HSBC, the world's third largest banking company by market value after Citigroup Inc and Bank of America Corp. Mr Green will retain his responsibilities for corporate and investment banking.
Green, who has worked for HSBC since 1982, said he doesn't expect to make big changes, though "there's always room for fine tuning.
A 91 percent drop in charges also helped the bottom line, after HSBC took a US$520 million hit in 2001 from currency redenomination in Argentina, and a US$575 million charge arising from litigation over the acquisition of the late Edmund Safra's Republic New York Corp.
Pre-tax profits were $9.65 billion, slightly below analysts' expectations of $9.79 billion but up from $8.0 billion in 2001.
Group chairman Sir John Bond called 2002 "a testing year for the financial services industry" and said prospects for 2003 "are hard to predict."
Of most concern is the flat performance of the core Hong Kong unit, where the bank was hit by spiralling credit card defaults as a result of the ongoing local recession which has produced record high personal bankruptcies.
"The outlook for 2003 is characterised by the prospect of continuing deflation in Hong Kong, lack of demand for loans, and pressure on margins," the bank said.
"Across Asia, the uncertainties of the international situation will continue to constrain growth."
HSBC's main Asian operating unit reported net profit of HK$25.9 billion (US$3.32 billion), down from HK$26.24 billion in 2001.
The bank also named a new chief executive designate, Stephen Green, who is the current head of corporate and investment banking.
Green, 54, who has long been considered a front runner for the position, will step up on May 30 to succeed Sir Keith Whitson, 59, who is retiring after 42 years at the bank.
Sir John Bond, 61, remains chairman of HSBC, the world's third largest banking company by market value after Citigroup Inc and Bank of America Corp. Mr Green will retain his responsibilities for corporate and investment banking.
Green, who has worked for HSBC since 1982, said he doesn't expect to make big changes, though "there's always room for fine tuning.
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