HSBC profits surge 20% to €8.75bn

Annual profits at banking giant HSBC surged 20% to more than €8.75bn today after reducing the amount it takes to cover bad and doubtful debts.

But HSBC said prospects for this year were hard to predict, with the beginning of the year characterised by a high degree of economic uncertainty.

The group added that it would also contribute an extra €729m to its pension scheme in 2003 because of the impact of weaker investment returns.

Chairman John Bond described today’s figures as a solid set of results and added: “Our performance reflected the resilience of our local businesses and our ability to generate reasonable returns in them.”

Operating profits before exceptional items in 2002 rose 3.2% to $11.64bn (€10.77bn), as HSBC benefited from strong growth in its commercial banking division and solid progress in personal finance services.

At the bottom line, figures were helped by a reduction of $716m (€662.8m) in bad debt charges because last year’s figure included provision for HSBC’s exposure to the Argentinian financial crisis.

The group is one of the world’s largest banking and financial services organisations, with 7,000 offices in 81 countries and territories. About a third of profits are generated in Hong Kong.