Growth slows for HSBC in Hong Kong
HSBC Holdings' Hong Kong arm maintained tepid profit growth last year amid a regional economic slowdown and increasingly high impairments in the city and on the mainland.
HSBC Holdings' Hong Kong arm maintained tepid profit growth last year amid a regional economic slowdown and increasingly high impairments in the city and on the mainland.
HSBC Ltd's pre-tax profit, excluding two major one-off net profit gains in 2013, grew 5 per cent to HK$111.19 billion last year, a sharp contrast to the banking group as a whole, which saw pre-tax profits tumble 17 per cent.
The growth belies challenges faced across the banking industry in Asia as growth in China slows and more borrowers default on loans.
Impairments for HSBC Ltd jumped by about 40 per cent to HK$4.9 billion.
Operating costs rose to HK$72.95 billion, an increase of 6.1 per cent.
"As Asia enters a period of lower demand and reduced growth, the prospects of higher US interest rates and continued dollar strength carry risks for the region," HSBC Ltd chairman Stuart Gulliver said in the bank's earnings report. "If sustained, low oil and commodities prices will also have mixed effects."
Mainland China's gross domestic product grew 7.4 per cent last year, the slowest growth in 24 years. HSBC projected that the world's second-largest economy would slow further to 7.3 per cent this year, while many economists estimate growth could dip below 7 per cent.
HSBC Holdings' results also pointed to signs that growth was slowing in Asia and that impairments as a result could continue to rise.
The group notched US$162 million in loan impairment charges in Hong Kong in the last three months of the year, a quarter-on-quarter jump of 175 per cent.
