HSBC Australia books 42-per cent rise in profits

06 March 2009

The Australian arm of the world's largest bank, HSBC, is gearing up to capitalise on the withdrawal of other foreign banks from the local syndicated lending market, even as it posted a 42 per cent jump in its full year 2008 pre-tax profit to $176 million.

The London-based HSBC Holdings subsidiary in Australia expanded its commercial banking customer base by focusing on those with cross-border needs, which led to an 84 per cent leap in pre-tax profit to $68 million, the bank said in a statement on Thursday.

The standout performance came from HSBC Australia's global banking and markets division which more than doubled its pre-tax profit to $102 million - up 143 per cent on the 2007 result.

By contrast, the bank's personal financial services unit saw its pre-tax profit halve even as it grew its high net worth customer base by 76 per cent and grew credit card market share partly through the September 2008 issue of the white-label Woolworths' Everyday Money credit card.
Pre-tax profit for the division plummeted 53.7 per cent to $19 million.

The Australian operations of the bank, which employs 1600 people, grew its gross loan book during the year from $12.99 billion to $13.3 billion on the back of higher activity in its residential mortgage, personal and property businesses.

Local chief executive Stuart Davis said HSBC is committed to growing its presence in Australia, but the lender will come under margin pressure in 2009 as credit quality weakens.