HSBC’s figures demonstrated the differing prospects between the lender's developed and emerging market operations, which it said were "increasingly in the driving seat". Earnings may have fallen in all of the bank's regions in 2009, but it was Hong Kong, the rest of Asia Pacific and Latin America that delivered the most defensive performances.
Hong Kong's pre-tax profit, for example, reached $5bn (£3.3bn), down by a mere 8 per cent in 2009. It was a similar story throughout the rest of Asia Pacific - pre-tax profits fell just 11 per cent to $4.2bn. That's in stark contrast to Europe, where pre-tax profit slumped 63 per cent to $4bn, and North America, where business is dominated by HSBC's dreadful sub-prime unit, the former Household International. That particular division may now be closed and in run-off, but a hefty $15.7bn loan impairment charge, representing 59 per cent of the group's total charge, meant a loss there of $7.7bn. Overall, the group's impairment charge rose 6 per cent year-on-year to $26.5bn.
Still, after last year's $17.8bn rights issue, HSBC does looks sufficiently well placed to tackle further bad debts, with its core tier-one capital ratio at a healthy 9.4 per cent. Prior to these figures, broker Charles Stanley expected 2010 EPS of 71¢.
HSBC HOLDINGS (HSBA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 695p | MARKET VALUE: | £121bn | |
| TOUCH: | 694-695p | 12-MONTH HIGH: | 767p | LOW: 270p |
| DIVIDEND YIELD: | 3.2% | PE RATIO: | 31 | |
| NET ASSET VALUE: | 736¢ | |||
| Year to 31 Dec | Pre-tax profit ($bn) | Earnings per share (¢)* | Dividend per share (¢)* | |
|---|---|---|---|---|
| 2005 | 21.0 | 119 | 60.1 | |
| 2006 | 22.1 | 122 | 66.2 | |
| 2007 | 24.2 | 144 | 75.8 | |
| 2008 | 9.31 | 41.0 | 93.0 | |
| 2009 | 7.08 | 34.0 | 34.0 | |
| % change | -24 | -17 | -63 | |
Ex-div:16 Mar Payment:05 May *Adjusted for 2009's rights issue £1=$1.522 | ||||
