HSBC profit rises despite subprime hit British bank posts 21% rise in 2007 net income, despite $11.7 billion in U.S. impairment charges related to failed loans.
LONDON (AP) -- HSBC Holdings PLC said Monday profit rose 21% in 2007 despite taking a beating in North America with hefty impairments on subprime and other loans.
The company reported a profit of $19.1 billion compared with $15.8 billion in 2006.
Pretax profits in North America fell 98% to $91 million compared to $4.67 billion in 2006.
Loan impairment charges related to the subprime mortgage crisis in the United States and other credit provisions rose 79% to $11.7 billion.
That figure was at the top end of expectations, said Richard Hunter, analyst at Hargreaves Lansdown Stockbrokers.
Total group loan impairment charges and other risk provisions were up 63% to $17.2 billion.
"HSBC has fared better than many of its competitors in shedding just 14% of its share price in the last year. However, it continues to be held back by the specter of potential further writedowns with, in particular, its exposure to the US market having unnerved many investors," Hunter said.
Net operating income rose 13% to $61.75 billion.
HSBC (HBC) shares rose 0.9% on the London Stock Exchange.