HSBC applauds own performance after tough year

| 04/03/2010

(CNS): Following the announcement of the bank’s annual results on Monday, which revealed an underlying pre-tax profit of US$13.3 billion, the Cayman Islands CEO of HSBC, Gonzalo Jalles, said the results highlight the strength, diversity, and global reach of the group. After another challenging year for the economy and financial sector, the bank said it had delivered a resilient performance for 2009, demonstrating the importance of its diversified business model. The bank said it was ahead of 2008 after excluding last year’s goodwill impairment and net underlying revenues were also strong, growing 8% to US$72.4 billion.

“The performance of the Cayman operations also surpassed expectations and we are grateful for the many customers who chose HSBC and took advantage of the products and services being offered,” Jalles said. “I am also very pleased with the performance of the HSBC team over the past year as the results could not have been achieved without their collective efforts.”

He said that, as a result of the performance, HSBC Cayman was well placed to launch Phase 2 of its expansion plans in 2010. ”For this year, we intend to begin offering additional retail products and services that will no doubt continue to provide value to new and existing customers,” he added.

According to Group CEO, Michael Geoghegan, while the bank was not immune to the downturn, the performance demonstrated that HSBC was one of the world’s strongest and most profitable banks. “Our financial strength has allowed us to support our customers through difficult times. The results were ahead of our expectations at the outset of the year, and they underscore HSBC’s strength throughout the most difficult stages of the economic cycle. In particular, our improved underlying performance highlights the strength of our diversified business model,” he added.

The improvements were supported by a stronger result in Global Banking and Markets, which delivered exceptional revenues, stronger Balance Sheet Management performance, and a significant decline in write-downs, the bank said in its release announcing the results.

HSBC also benefited from a substantial fall in loan impairment charges in US consumer finance offset by higher loan impairments elsewhere.

“During 2009 HSBC stuck to its fundamentals and, thanks to this clear focus and our balanced business model, we ended the year as we began: one of the world’s strongest and most profitable independent banks,” Geoghegan said.

The bank also stated that it continued to take steps to enhance its capital strength and liquidity in 2009. The business generated capital all four quarters, and the successful completion of the rights issue in April 2009 also added US$17.8 billion to shareholders’ equity.

Group Chairman Stephen Green said that throughout the crisis, HSBC had remained profitable, financially strong and independently owned by our shareholders. “The successful completion of our rights issue helped to set the tenor for market recovery, and demonstrated the strong confidence which our shareholders have in our future,” he noted.

Regardless of the speed and nature of the recovery, HSBC said it is well positioned as the world’s top banking brand, with strong capital reserves and liquidity, a broad and well-balanced business model and a proven strategy focused on emerging markets.

Category: Business

Comments (20)

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  1. the Involuntary Investor says:

    BUTTERFIELD WIPED OUT!!!

    That’s what the headline should read.  Shareholders of the bank just had every dollar they had invested in the bank reduced to a value of about 18 cents.  That’s a good performance for a bank, I’d say.  NOT!

    I’m curious about something.  When Herr Dictator announced a tax on remittances to foreign countries, and everybody with half a brain instantly wired every cent of their money to another jurisdiction, do you think that Butterfield suffered as a result of the loss of all that operating capital?  It would be funny if the near-failure of Cayman’s flagship bank could be laid at the feet of Herr Dictator’s foolishness. 

    I also wonder when the other shoe will drop.  Shouldn’t there be an announcement now from the Cayman Pension Fund people about the catastrophic failure of all of our investment funds resulting from the Butterfield shareholder wipeout?  Just curious.

    And yes, I do have money in the pension fund, and yes, I did wire every cent of my money to another jurisdiction when Herr Dictator threatened to tax money transfers.  Maybe I helped torpedo my own pension fund.  Now that would be funny!

  2. Anonymous says:

     Maybe HSBC should just publish the results of their Cayman operations  like Butterfields do.

     

    • Anonymous says:

      Very true. While we are happy to know that the HSBC Group is performing greatly, we in Cayman want to know how is the Cayman operation doing.  Our deposits are exposed to your Cayman operations because as far as I know (stands to be corrected on this) Cayman HSBC is not a branch of the HSBC group but a subsidiary so it stands on its own and its shares are fully owned by the Group Company. Caymanians’ deposits are exposed.  So Caymanians want to know how it is doing.  How are your commercial and residential loan portfolios doing, how is your investments portfolio performing.  Are there any bad commercial loans in your books? These are legetimate concerns for Caymanian clients. What’s happenning with your business model ???  Are you moving on to offer more retail products because your initial business model – premier banking only is failing ??? Please let us know.  CIMA is reposnsible to ensure that the bank is operating in a manner it protects caymanian customers. I do not have any doubts about your operations, but we want to know. These days, sweet bullish talks and secrecy are the order of the day in the banking business.

      • Anonymous says:

        Butterfield Cayman made a good profit last year and even this year they made a small profit, however they got wiped out.

        Do you really think that if the Carlile group and others wouldn’t have effectively bought them out the Cayman subsidiary could have continued operating?

        Do you really think that any of the international banks would let the Cayman subsidiary fail affecting their global businesses?

        The local accounts are irrelevant.

  3. Anonymous says:

    Is this all HSBC staff on here? Geoghegan capitulated to the backlash against bankers bonuses and donated the money to his wife’s charity, no doubt gaining a sizable tax break.  The profits banks make from the ordinary man are nothing short of sickening.

    Way to go HSBC, congrats on milking the public to feather your own nest.

    • Anonymous says:

      you are seriously naive if you think any business is not going to ‘trim the fat’ and lay off unneeded staff in order to keep the business viable. Ridiculous comment. Being Caymanian does not make anybody immune to the obvious rules of business and survival. Caymanians seem to think that accident of birth is somekind of golden shawl with magic powers or something! Grow up!

       

    • Anonymous says:

       No its not all HSBC staff –  please bear in mind that HSBC unlike a lot of the other banks did not need bailed out  – Bonuses are not going tostop its a fact of life – he didnt need to donate his money to charity – How many of the Cayman big guns donate their bonuses ??  The profit levels must be rather nice at the likes of Maples etc – 

  4. Anonymous says:

    Does Mac know more than he lets on – how is it that Government has started doing deals with HSBC for help?

     

  5. Anonymous says:

    wheres the reports from the other banks? Butterfield is broke, HSBC is still stable – whats the status for the other retail banks?

    and im not convinced by Butterfield’s spin-doctoring: their reliance on bail out from the Carlyle Group (of all entities) is incredibly troubling!!

    • Anonymous says:

      I bank at Scotia and CNB and I want to see their results also

      • Anonymous says:

        If you want them, go and ask for them. If they do not give them to you, move your banking. Just dont complain and then sit back and do nothing.

  6. Anonymous says:

    I’m not sure that laying off a pile of Caymanians last year to make a profit is considered good.  For HSBC yes, but for all those laid off, just ask them. 

    • Harsh but true says:

      HSBC exists for the benefit of the shareholders of HSBC not some charity for the furtherance of Caymanians. 

    • Anonymous says:

      oh yeah, right – laying off a couple admin staff in Cayman led to a $billion group profit.

      If you are one I can see why the let you go! Hope you werent in charge of anybody’s money!!

  7. Anonymous says:

     Group CEO Geoghan has committed his bonuses re next four years to be donated to Charity – says a lot about the way this company is run 

  8. Anonymous says:

    Maybe we should all think more carefully who do we bank with

  9. Anonymous says:

    maybe Butterfield and other local banks should be taking lessons from HSBC (which is run mainly by Caymanians, I will add)

    • Anonymous says:

      Oh sure. HSBC is the company which purchased a sub prime mortgage provider in USA just before the sub prime mortgage crisis started. They lost US$ 500 million as a result. 

      • Anonymous says:

        They may have lost 500M as you say, but this is a spec of dust in its balance sheet, the company is still profitable.

        On the other hand BoB lost 200M, ran out of capital and lost the bank. Absolute numbers don’t mean anything.

      • Anonymous says:

        so whats your point?

        every bank had exposure from the crisis. but HSBC came out without bail out and government (i.e. taxpayers!) money