HSBC profits fall but India biz grows 26%

European financial services major HSBC Holdings today posted a steep decline in 2008 profits at $9.3 billion even as its India business grew by as much as 26 per cent during the same period.....

Written by Press Trust Of India | London | Published:March 3, 2009 1:29 am

European financial services major HSBC Holdings today posted a steep decline in 2008 profits at $9.3 billion even as its India business grew by as much as 26 per cent during the same period.

In a sign of the financial meltdown impacting the company,HSBC is planning to raise 17.7 billion dollars through a rights issue from the shareholders.

HSBC has reported a pre-tax profit of $9.3 billion for the full year 2008,a decline of 62 per cent over the corresponding period a year ago.

Excluding goodwill impairment,the bank’s yearly profit dropped 18 per cent to $19.9 billion. However,HSBC,which has been less affected in the financial meltdown compared to its rivals,recorded strong growth in India.

The bank’s pre-tax profit from from India business shot up 26 per cent to $666 million,it said in a statement.

“We propose to raise,on a fully underwritten basis,approximately $17.7 billion of equity which will increase our capital ratios by 150 basis points,strengthening the core equity tier 1 ratio to 8.5 per cent and the tier 1 ratio to 9.8 per cent,both on a pro-forma basis as on December 31,2008,” the firm said.

Warning of a difficult outlook for this year,HSBC would be looking at acquisitions in emerging markets including India in banking and retail brokerage.

“Emerging markets acquisitions in banking in Taiwan and Indonesia and in retail brokerage in India,” the statement noted.

According to HSBC,the planned raising of capital to the tune of $17.7 billion would enhance its ability to deal with the impact of an uncertain economic environment and to respond to unforeseen events.

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