Acquisition helps boost HSBC profits by 58%
Net income in the six months through December rose to a record $4.67bn from $2.96bn in the year-ago period, according to Bloomberg calculations. The median estimate of nine analysts surveyed by Bloomberg was for profit of $4.46bn. The acquisition last March of Household, a lender to consumers with spotty credit histories, gave London-based HSBC 50 million customers in the US. Chairman John Bond, 62, said he now plans to expand in countries such as India, China and Brazil.
“HSBC had some nice easy benefits from the acquisition of Household,’ said Alan Beaney, who helps manage the equivalent of $1bn, including HSBC shares, at Principal Investment Management in Sevenoaks, England. “India and China are attractive areas because that’s where the economic growth is.”
HSBC shares fell 14p, or 1.6%, to 861.5p at 11.58am in London. The company set aside $6.1bn last year to cover loans that may not be repaid, up from $1.3bn in 2002 because of the Household acquisition.
“The outlook is much better than it was this time last year,” Mr Bond said. “We are naturally very keen to increase our investment in China. We are looking around the world all the time at opportunities.”
