HSBC Says Profits Up In Q1, Despite Subprime Blow

by Mary Swire, for LawAndTax-News.com

15 May 2008

HSBC announced increases in first quarter profits this week, despite being dealt a USD3.2bn blow by the subprime crisis in the American housing market.

However, according to reports, the company's London Headquarters reported an increase in share prices this week after investors admitted they were expecting the company to make a greater loss than it actually did.

"HSBC has made a strong start to the year despite the turbulence in global financial markets," an AFP report quoted HSBC as announcing, adding:

"In the first quarter of 2008, HSBC's profit was ahead of the equivalent period last year."

Speaking to Bloomberg ahead of the announcement, Alex Potter, a London-based analyst at Collins Stewart commented:

"What's more important than the backward-looking numbers that we've got will be the expectations statement about how well provided the business is at this stage and how much more money they'll lose."

"That will tell us what the potential for recovery in 2009 is."

Meanwhile, HSBC Malaysia on Monday announced strong growth in revenue of 17.6%, and profit before allowance for losses on loans and financing of 25.7% for the three months ended 31st March 2008, compared to the corresponding period last year.

The Malaysian operation further revealed that there had been an improvement in all major income streams, with other operating income being the main catalyst behind the growth figures.

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