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HSBC 2009 profit rises 2 pct to $5.8 billion

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[March 01, 2010]  LONDON (AP) -- HSBC Holdings PLC, Europe's largest bank, reported Monday that full-year profit rose 2 percent as sharply lower operating costs helped offset an increase in loan impairment charges.

HardwareFor the year ending Dec. 31, the company made an after-tax profit of $5.8 billion compared to $5.7 billion a year earlier. Operating expenses fell 30 percent to $34.4 billion, the bank said.

Pretax profit fell 24 percent to $7.08 billion, well below the analysts' consensus of $11.5 billion, the bank said Monday.

Impairment charges on bad loans rose from $24.9 billion to $26.5 billion. Operating income, a measure of revenue, fell 11 percent to $78.6 billion.

HSBC shares were down 3.6 percent at 693.7 pence on the London Stock Exchange.

"The initial share price performance has mirrored some mild disappointment with the numbers, which had been subject to high expectations," said Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers.

The bank talked up its underlying pretax profit of $13.3 billion, up $4.7 billion from 2008. The underlying figure excludes the effects of currency movements, acquisitions and disposals.

"This improvement was largely driven by stronger results across our Global Banking and Markets businesses, where we saw exceptional revenues, considerably stronger balance sheet management performance, and a significant decline in writedowns compared with 2008," said Chief Executive Michael Geoghegan.

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"It also reflected a significant fall in loan impairment charges in our U.S. consumer finance portfolios, offset by higher loan impairment charges elsewhere."

Geoghegan broke ranks with CEOs of other British banks by accepting his annual bonus worth $6 million, although Geoghegan plans to donate that bonus to charity, the bank said.

CEOs at Barclays, Royal Bank of Scotland and Lloyds Banking Group all refused bonuses for 2009.

[Associated Press]

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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