The Indian operations of HSBC reported a 26 per cent increase in profit before tax (PBT) at $666 million for calendar 2008 on the back of better performance by its treasury and commercial banking divisions.
However, the parent company reported a 68 per cent fall in net profit at $6.5 billion in 2008 compared with $20.45 billion in 2007, due to higher loan impairment and losses from its North American operations. HSBC’s India operations have contributed 10 per cent to the group’s global pre-tax profits.
“We (referring to India operations) have moved up to the seventh place in global rankings in terms of earnings from banking operations alone,” said Naina Lal Kidwai, group general manager and country head, India. If one-off items and earnings from non-banking operations were included, the ranking would come down by two places.
The bank did not tell about the total income earned from India as it would be disclosed at the end of the current financial year.
Segmentwise, personal financial services continued to be in the red as the division extended its pre-tax loss to $155 million as against a loss of $70 million in calendar 2007. Kidwai attributed the loss to a combination of factors, including one-time expenditure towards upgrading IT infrastructure and opening of three new branches. Losses from unsecured lending also contributed to the losses, but the exact number was not disclosed.
However, the global banking and markets division reported a pre-tax profit of $578 million compared with $429 million in calendar 2007, an increase of 35 per cent. The commercial banking division also reported a growth in pre-tax profit to $118 million compared with $88 million in 2007.
Other than bad assets in personal unsecured lending, Kidwai said the bank was not affected because of the current economic downturn in the economy.
In the current year, HSBC would continue to invest in its existing operations such as personal financial services and private banking as these two would become the future growth drivers.
Guardian, a news paper from UK reports that HSBC helped drag the stockmarket to six-year lows today after embarking on a record-breaking ?12.5bn cash call and admitting that it had lost the entire $15bn (?10.7bn) it had spent on its "catastrophic investment" in the US sub-prime mortgage market.
HSBC chairman, Stephen Green, admitted the bank should never have bought Household International in the US in 2002 as its shares tumbled by almost a fifth to 399p. HSBC, the world's third-largest bank, was the biggest faller in the FTSE 100, which closed 5% lower.
It seems most of these MNC banks are today living off Indian profits.
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The Indian operations of HSBC reported a 26 per cent increase in profit before tax (PBT) at $666 million for calendar 2008 on the back of better performance by its treasury and commercial banking divisions.
