HSBC rules out big US and S. Korea deals as profit jumps

LONDON: HSBC Holdings plc, the world’s second largest bank, posted 2004 profit towards the low end of forecasts yesterday, but was upbeat on prospects for its US business as it rejected big deals there and in South Korea. 

For the year to Dec 31, 2004, the group's pre-tax profit rose 37% to US$17.6bil, compared with a consensus figure of US$17.83bil in a Reuters poll of 10 analysts.  

“Conditions in the US this year look favourable to (HSBC’s) kind of model,” finance director Douglas Flint told reporters on a conference call.  

With those conditions and American banks highly priced, it would take “a pretty extraordinary opportunity to make one want to do something” in the United States, he said.  

Unsecured lending, which had been sluggish amid rising house prices, should pick up for HSBC in the United States by the end of the first half, he added.  

Flint also ruled out a big buy in South Korea, where HSBC lost out to rival Standard Chartered in an auction for Korea First Bank last month. “I don’t think we will make an acquisition in Korea,” he said. 

HSBC's 2004 figures benefited from acquisitions, including a full-year contribution from its US Household consumer finance unit, and about 10 months from Bank of Bermuda, purchased a year ago. 

Some analysts had expected the acquisitive global bank to make further takeovers to boost profit after growth stagnated at Household in the third quarter. HSBC tied itself to the US consumer when it bought Household for US$14.8bil in March 2003. 

The bank's revenue rose 23% to US$50.59bil for 2004, the same rate of increase as operating costs, which climbed to US$25.88bil. Bad debts rose slightly to US$6.36bil from US$6.09bil a year earlier. 

HSBC said concerns about global imbalances, such as the US budget deficit, had partly been allayed, with consumer debt in the United States proving manageable. 

The bank raised its full-year dividend by 10% to 66 US cents a share. – Reuters  

Latest business news from AP-Wire

Article type: metered
User Type: anonymous web
User Status:
Campaign ID: 1
Cxense type: free
User access status: 3
Join our Telegram channel to get our Evening Alerts and breaking news highlights

Next In Business News

KPMG to pay RM333mil to M’sian govt as 1MDB settlement, says Finance Ministry
China stocks down over 1% on Evergrande fallout fears
Tobacco firm Philip Morris seals deal for UK's Vectura with 75% support
Asian shares fall on Chinese developers' woes
Japan cuts economic view on weaker production, spending due to Covid revival
HK stocks drop 2% to 2021 low on Evergrande contagion fears
Indonesia's Telkom to pursue IPO of unit in Q4, plans spinoffs
Malaysia's Kimanis oil exports to fall on issue at Shell field
Oil prices extend gains after draw in U.S. stocks
Asian shares fall again, dollar drifts

Stories You'll Enjoy