Olympia costs HSBC dollars 187m

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The Independent Online
HSBC HOLDINGS, the new parent of Midland Bank, has set aside total provisions of dollars 187.5m ( pounds 95m) from its profits against the collapse of the Olympia & York group, 24 per cent of its exposure, the company said yesterday.

HSBC is O&Y's biggest creditor with loans of dollars 768m outstanding. But as security it holds controlling shareholdings in two large subsidiaries outside the property business, Abitibi-Price and Gulf Resources, so provisions may not be typical among banks.

William Purves, chairman, said the restructuring of the O&Y group was being closely monitored and additional provisions would be made if appropriate. In answer to questions in Hong Kong he made clear that a write-back might also be a possibility, given the strong security HSBC holds.

Despite a 63 per cent increase in HSBC bad debt charges to HKdollars 4.48bn ( pounds 305m) compared with a year ago, group pre-tax profits rose 40 per cent to HKdollars 7.669bn ( pounds 521m) in the half- year to June. After-tax profit rose 51 per cent. The results did not include any contribution from Midland. Had Midland been included, the group profit would have been pounds 575m.

The number of potential buyers for Canary Wharf has risen to more than 10, creditors to the development were told by Stephen Adamson, joint administrator, on the first of two days of meetings. They were sufficently serious about investing in the project to sign secrecy agreements, he said.

Some creditors objected when the banks took three of the five seats on the creditors' committee. But a banker said that as it was bank money keeping Canary Wharf alive, he would have to insist on voting Barclays, Lloyds and Canadian Imperial Bank of Commerce on to the committee

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