Despite being hit with $17.2 billion in bad debts, HSBC has been able to achieve a 10% rise in profits and has even increased its shareholder dividend.
Europe’s biggest bank announced a record-breaking profit of $24.2 billion before tax for 2007, although it disappointed Reuters analysts who had expected $24.7 billion.
However, profits were up from $22.1 billion in 2006 and annual underlying profit growth was 5%, as had been widely expected.
Much of the money was made in foreign countries, with the bank’s US results unsurprisingly weak given the sub-prime crisis. In 2007, HSBC only saw a profit of $91 million from its North American operations.
The bank’s operations in Hong Kong saw a 42% increase in profits, totalling over $7 billion, while the rest of Asia was 70% more profitable for HSBC than the previous year.
Analysts said that HBSC’s policy of diversification, spreading into China, India and Hong Kong were an antidote to the US sub-prime troubles.
In morning trading, shares in HSBC had risen by 0.8%, bringing the bank’s market value to around $181 billion.