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LONDON — Banking group HSBC Holdings PLC said Monday that profit rose 21 percent in 2007 in the face of hefty impairments on subprime and other loans in North America.
The company reported a profit of $19.1 billion compared with $15.8 billion in 2006.
The company said it absorbed $2.1 billion in write-downs on asset-backed securities and credit trading positions, leveraged and acquisition financing positions, and monoline credit exposure. HSBC last year closed its mortgage-backed securities operation in North America to new business.
Loan impairment charges related to the subprime mortgage crisis in the United States and other credit provisions rose 79 percent to $11.7 billion.
That figure was at the top end of expectations, said Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers.
"HSBC has fared better than many of its competitors in shedding just 14 percent of its share price in the last year. However, it continues to be held back by the spectre of potential further writedowns with, in particular, its exposure to the U.S. market having unnerved many investors," Hunter said.
Net operating income rose 13 per cent to $61.75 billion.
Shares rose 0.9 percent to 773 pence ($13.38) in London.
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On the Net: http://www.hsbc.com
