HSBC profit slumps 70%
HSBC PLC, Europe’s largest bank by market value, has reported on Monday, a staggering 70 per cent drop in profits in 2008. The bank said that it aims to raise USD 17.7 billion (S$27.5 billion) by issuing shares. The bank also plans to cut 6,100 jobs in the US as the financial crunch deepened.
The bank’s net profit fell to USD 5.7 billion in the financial year 2008 as against the USD 19.1 billion a year earlier, in 2007. According to the bank, the slump in the profit is reportedly due to greater charges on the value of its assets and operating expenses.
A key indicator of HSBC’s financial strength, Tier 1 capital ratio fell to 8.3 per cent in 2008 from 9.3 per cent a year earlier.
The bank also aims to shutting most of its HFC and Beneficial branches whereby cutting around 6,100 jobs in the United States.
According to the HSBC chairman Stephen Green, “In this difficult environment, we missed our profitability targets. The coming twelve months will be difficult. We expect parts of Asia, the Middle East and Latin America to continue to outperform Western economies, but to be constrained by the global downturn.”
