LONDON, Feb 28, 2011 – Banking giant HSBC said on Monday that its net profit more than doubled to $13.16 billion (9.56 billion euros) last year as bad debts plunged to the lowest level since 2006.
HSBC said in a results statement that pre-tax profits soared by nearly 170 percent to $19 billion in 2010, while loan impairments and other credit risk provisions nosedived 47 percent to $14.04 billion.
Group revenues increased by 3.1 percent to $68.3 billion last year.
Market expectations, however, had been for net earnings of $14.02 billion, according to Dow Jones Newswires, with the shares suffering as a result when they fell short.
In mid-morning trade, HSBC shares were down nearly 4.0 percent in a slightly lower London market.
"Underlying financial performance continued to improve in 2010," HSBC chief executive Stuart Gulliver said in the results statement.
"All regions and customer groups were profitable, as Personal Financial Services and North America returned to profit," added Gulliver, HSBC\’s former head of investment banking who replaced Michael Geoghegan last month.
"Commercial Banking made an increased contribution to underlying earnings and Global Banking and Markets also remained strongly profitable, albeit behind 2009\’s record performance, reflecting a well-balanced and diversified business."
HSBC is headquartered in London but the group was founded in Hong Kong and Shanghai in 1865 and the bank regards Asia as its most important region.
The group said it continued to draw strength from fast-growing emerging markets.
"Credit experience continued to improve, as a result of a stronger global economy and our actions to reduce balance sheet risk," Gulliver said.
"As a globally-connected bank with a growing presence across the world\’s faster-growing regions, HSBC also benefitted from higher trade volumes and strong momentum in emerging economies, especially in Asia.
"Asia contributed the largest proportion to underlying pre-tax profits, while the contributions made by Latin America and the Middle East also increased.
"Together with our conservative management of the balance sheet, this improved performance allowed us to concentrate on serving our customers and to further strengthen our capital position."