HSBC Writes Off £1.3bn
HSBC, has written off $2.6bn (£1.3bn) because of the ongoing credit crunch. However, the bank has announced that its profits for the first three months of this year exceeded the same period last year, and this appears to be true for all countries where HSBC operates.
This is Money quotes Chief executive Michael Geoghegan speaking on the state of the economy in the US.
Chief executive Michael Geoghegan warned: ‘It seems likely that the deterioration in the US housing market will extend into 2009. It is also clear that US economic growth has slowed and there is an increased likelihood of a recession this year.’
HSBC continues to remain successful with pretax profits growing compared to 2007.
However, the level of bad debts in HSBC’s personal finance business in the UK is actually down on a year ago. Pretax profits rose in Britain but much of this is because the bank, like its rivals, has stopped paying out to customers claiming unfair overdraft charges until the case between the banks and the Office of Fair Trading is finally resolved. Strong areas were savings and so called packaged accounts.
In investment banking, Geoghegan said pre-tax profits were down on a year ago but better than the third and final quarters of 2007. He added that there had been higher trading in the first quarter as institutions rebalanced their portfolios as a result of the credit crunch which, he added, could mean dealing volumes will be more subdued for the rest of the year.
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