HK Bank offshoot tips return to profit
THE Hongkong Bank of Australia is expected to edge back into the black with a token profit for last year following three consecutive years of blood-letting.
Analysts are expecting earnings of A$5 million (about HK$26 million) to $10 million when results are posted this month, after losses of $37.8 million and $273.2 million in 1991 and 1990, respectively.
The bank's chief executive, Mr Richard Orgill, said the capacity of the wholly owned Australian unit of the Hongkong and Shanghai Banking Corp to sustain profitability through this year depended on whether firms on the loan book could survive the country's recession.
He said: ''Until there is genuine economic recovery we and most banks in Australia will find it difficult to say that we have turned our banks around or back to levels of sustained profitability.'' In recent years, Hongkong Bank has been hard hit by loans to and rescue packages for some of Australia's most flamboyant entrepreneurs.
Its already ''substantial'' non-performing loan book remained a serious problem, Mr Orgill said.
Not only was it ''hard work'' to reduce its size but the costs associated with carrying such loans weighed heavily on the bank's performance.
Despite such uncertainties, Hongkong Bank was predicting a profit.
for the year and would release a forecast in June.
