Tuesday November 11, 2008
Asian growth helps HSBC offset US losses
Profit in third quarter ahead of a year earlier
LONDON: Europe’s biggest bank HSBC Holdings said its profit in the third quarter was ahead of a year earlier as growth in Asia helped offset almost US$5bil in bad debts on US home loans and asset writedowns.
HSBC said its profits in the nine months to the end of September was lower than the same period of 2007.
Its tier 1 capital ratio was 8.9% at the end of September, near the top of the bank’s 7.59% targeted range, and the bank said it was “a major recipient” of deposit inflows in the current financial market turmoil.
HSBC said global economic growth will continue to slow during “the next few quarters as recession takes hold in several mature economies”. Asian growth will slow but is likely to remain “relatively more resilient”, it said.
HSBC said its charge for bad loans in personal financial services in the US rose to US$4.3bil in the quarter, up by US$700mil from the previous quarter.
The HSBC building is pictured in Canary Wharf in London in this file picture - Reuters It had been expected to report another near US$4bil on bad US home loans as its mortgage book is run down and unsecured losses pick up as unemployment rises.
It wrote down the value of credit trading positions by US$600mil in the quarter, lower than writedowns in the previous two quarters partly due to changes in accounting rules.
HSBC and other banks have reclassified how some assets are accounted for under new rules. Without the reclassification HSBC said its third quarter writedown would have been US$835mil higher.
Bad debts also rose in its European retail business. – Reuters
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