HSBC net drops 70 per cent; to cut 6,100 jobs in US

02 March 2009

HSBC Holdings, Europe's largest banking group by market value, today reported a 70 per cent drop in its net profit and announced plans to raise $17.7 billion fresh capital through a share issue and cut 6,100 jobs in the US.

In 2008, net profit tumbled to $5.7 billion from $19.1 billion a year earlier as the company wrote down the value of assets, particularly in the US.

HSBC reported a 62 per cent drop in 2008 pre-tax profit at $9.31 billion against $14.91 billion in 2007, even as it said its India business grew by as much as 26 per cent during the same period.

Net interest income, however, was up $4.77 billion, or 13 per cent higher, at $42.56 billion in 2008 compared to 2007.

Net operating income before loan impairment charges and other credit risk provisions of $81.68 billion was $2.69 billion, or 3 per cent, higher than in 2007.

Total operating expenses (excluding goodwill impairment) of $38.54 billion declined by $507 million, or 1 per cent, compared with 2007. On an underlying basis, and at constant currency value, operating expenses were broadly unchanged.