HSBC up 19% as dealing profits soar
Tuesday 15 August 1995
The bank recommended a 15.6 per cent increase in the interim dividend to 9.25p a share. "A good performance was turned in by all our commercial banking operations which reported higher profits," Sir William Purves, group chairman, said. Midland Bank reported a 19 per cent rise in pre- tax first-half profits to pounds 527m. At the operating profits level before provisions, Midland's earnings were up by 20 per cent to pounds 537m. While the commercial banking operations took advantage of the higher interest income and the improved dealing activities, HSBC's investment banking operations suffered in what Sir William described as "challenging market conditions".
Overall earnings in this sector, covering merchant banking, securities trading and asset management, saw a 14 per cent drop in pre-tax profits to pounds 104m. In particular the securities trading arm, mainly James Capel, suffered a halving of its pre-tax profits to pounds 18m, reflecting lower trading volumes and fierce competition. Half-year profits in asset management were pounds 3m down on 1994 to pounds 10m.
HSBC is still trying to reorganise its investment banking operations into a more closely integrated organisation.
Sir William Purves singled out asset management, along with commercial banking in the US, as an area where HSBC is looking to bolster its activities by acquisition. "We would like to develop asset management, but there are a limited number of other players for sale and we do not have in mind to buy a very large one," he said.
Charges for bad debts were pounds 195m compared with pounds 173m in the first half of 1994. The group's cost/income ratio was 56.3 per cent, an improvement on 59.4 per cent for the same period of 1994, despite a 5 per cent rise in operating expenses.
There was disappointment over the lacklustre 4 per cent rise in profits at the Hang Seng Bank, which reported earnings lower than many analysts expected.
The bank, which focuses heavily on the local Hong Kong market, has been hit by the downturn in property loans.
HSBC's results show that while the Midland Bank and the Hongkong Bank have more or less the same amount of assets, the Midland Bank employs over 45,000 people, more than double the Hongkong Bank's staff.
Yet it made a net contribution to group profits of pounds 326m, which was almost half the pounds 629m chipped in by HSBC's original bank in Hong Kong.
Investment Column, page 16
- 1 Scottish independence: Ireland since 1919 is a lesson for Scotland in what a Yes vote means
- 2 Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
- 3 Lego breaks out of the toy box and heads for the gallery
- 4 Julian Assange and Edward Snowden join piracy mogul Kim Dotcom’s political campaign in New Zealand
- 5 Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
Thailand deaths: Pair's bloodied bodies found naked on Koh Tao beach
Jihadi John': MI5 may have identified Isis militant who killed David Haines but options limited
Russia freezes Ukraine into submission: Kiev admits country doesn't have enough fuel for winter
Scottish independence: Police will be on high alert on Friday whatever the result
David Haines beheading: David Cameron says Britain will hunt down Isis 'monsters' shown in video murdering aid worker
Daniele Watts: Django Unchained actress detained by Los Angeles police after being mistaken for a prostitute
The political class is doing what Hitler couldn’t – destroying Britain
Scottish independence: Nationalist leader Jim Sillars threatens pro-union companies with 'day of reckoning' after independence
Scottish independence: Yes campaign feels the heat as Alex Salmond's NHS claims come under furious attack
£23m Birmingham cycle scheme is attacked by Tory councillor for not catering to the elderly
Salmond accused of laughing off national debt with ‘what are they going to do: invade?’ joke
iJobs Money & Business
£20 - 24k (Uncapped Commission - £35k Year 1 OTE): Guru Careers: We are seekin...
£20 - 24k + Benefits: Guru Careers: This is a great opportunity for an enthusi...
£280 - £320 per day: Ashdown Group: The Ashdown Group have been engaged by a l...
£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...