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March 3, 2008

HSBC posts 10% profit rise to £12.17bn

by Gill Montia

Story link: HSBC posts 10% profit rise to £12.17bn

HSBC posted a 10% rise in pre-tax profit for 2007, to £12.17 billion, helped by strong growth in its Asian markets.

However, chairman Stephen Green described the outlook for the remainder of 2008 is “uncertain” stating: “The economic slowdown and the credit outlook in the US may well get worse before they get better.”

Last year, the bank’s US business, HFC, wrote down $11.7 billion in sub-prime related debt. The figure was $1 billion higher than expected and brought the group’s total writedowns for the year to $17 billon.

The future of the US business is now uncertain with suggestions that it will be sold or even wound-up.

Activist shareholder, Knight Vinke, is keen to see a disposal, which would be in line with the bank’s strategy of focusing on the Far East and other major growing economies.

The HSBC result takes the total amount earned by the eight banks listed on the London stock market to more than £41 billion, an increase of over £1 billion, despite the losses incurred in sub-prime related investments.

HSBC has raised its total dividend by 11% to 90 cents a share.

 

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