HONGKONG Bank, the local arm of HSBC Holdings and the biggest retail bank in the territory, boosted net profits by 16 per cent last year to $16.62 billion.
Net profits in 1994 were $18.91 billion but after stripping out a $4.56 billion item from an intra-group transaction on Hongkong Bank Malaysia, the figure was $14.35 billion.
Operating profit before provisions increased by a heftier 23 per cent to $22.8 billion but charges for bad and doubtful debt helped drag net profit down, chairman John Gray said.
'The increase of 16 per cent in attributable profit is a satisfactory performance but the 23 per cent increase in pre-provision earnings is equally important and arguably a better indication of underlying growth,' he said.
The difference between growth in operating profits and net earnings was due to bad debt provisions of $640 million against releases of $70 million last year.
'I said last year provisions for doubtful debt were unusually low in 1994 and would rise,' Mr Gray said.
'I was wrong in August when we released interim figures but I was right in the end.' He said the increase in the bad debt charge was due to reduced recoveries with only slight increases in new specific provisions.
