Rather in line with expectations, HSBC’s results are pretty strong.
Earnings per share up 18 per cent at $1.65, profit up 21 per cent to $19.1bn and the divi raised 11 per cent to $0.90.
Going against all that, is a massive $17.2bn loan impairment, almost all taken as charges in the US consumer finance business. The subprime frontline. Just over $16.1bn of those charges were personal financial service related – mortgages and such like:
Like many of its troubled peers, HSBC has also booked gains on the value of its own debt ($3.1bn) but structured finance-wise, few banks have the luxury of being able to write:
No material holdings of CDO’s backed by US subprime assets
Total writedowns in the global banking and markets business come in at $2.1bn. With no CDOs, the situation isn’t too terrible. Interestingly though, HSBC is taking only a $200m hit from a leveraged loan portfolio of $8.9bn, of which $2.9bn hasn’t been syndicated.
Related links
HSBC profits hold up despite US problems – FT.com