HSBC posts fall in pre-tax profits

| March 1, 2010 | 0 Comments
HSBC posts fall in pre-tax profits

Europe’s largest bank, HSBC, has today said pre-tax profits fell to $7.07 billion (£4.6 billion) last year compared with $9.3 billion in the previous year.

The banking giant said loan impairments charges and other credit provisions were $26.5 billion in 2009 - a rise of 9% compared with the previous year.

Stephen Green, chairman of the bank, said that while the worst of the recession is behind is, recovery is still a long way off and huge challenges remain.

“It was apparent by year end that the worst was over – even if confidence remained fragile and recovery would be uneven,” he said.

The results come after HSBC recently bowed to shareholder pressure and abandoned plans to raise its chief executive’s salary.

The Financial Times said the bank had consulted shareholders on proposals to raise Michael Geoghegan’s salary by 36% to £1.4 million ($2.2 million).

Mr Geoghegan has also confirmed he will give up to £4 million of his bonus to charity.

The FT also reported that the bank had planned to up the salary of Finance Director, Douglas Flint, from £700,000 to £900,000.

Meanwhile, HSBC’s results from the banking giant come just a few days after Lloyds Banking Group, which is 41% owned by the taxpayer, posted a full-year loss of £6.3 billion.

Last week, the Royal Bank of Scotland (RBS) posted a £3.6 billion loss, while Barclays announced record profits of more than £11 billion - a 92% rise on the previous year.

However, like Barclays, HSBC has not had to seek funding from the Government and the bank’s chief executive, Michael Geoghegan, has confirmed he will be donating his £4 million bonus to charity.

For some time now, bank bonuses have sparked public anger and have been the subject of heavy criticism since many believe their risks led to the recession.

As a result, Lloyds’ chief executive, Eric Daniels, said he will waive his £2.3 million annual bonus for a second year.

Furthermore, RBS chief executive, Stephen Hester, opted not to take his £1.6 million bonus, while Barclays chief executive, John Varley, and president, Bob Diamond, both agreed to sacrifice bonuses for the second year in a row, in light of the “intense public interest and concern” over bankers’ pay.

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