HSBC helped by wealth business
HSBC's private banking business is proving a solid crutch for the bank, after the group took a $2.6bn (€1.7bn) hit on its credit-related portfolios, which it announced in its first quarter results this morning.
The bank said in the statement that its private banking unit is attracting new business.
In an interim results statement, the bank said: "We continued to see strong inflows (into its private banking unit) of new client funds, which were greater than in the equivalent quarter in 2007, as HSBC benefited from its differentiated capital strength in the current environment. As a consequence, higher deposits and investment performance fees helped to drive a record quarterly profit."
The group's first quarter writedowns were half the amount written-off in 2007, but credit trading writedowns nearly doubled to $1.1bn, while writedowns from derivative transactions with monoline bond insurers more than doubled to $700m.
The bad news in the global banking and markets business was offset by gains in the value of HSBC’s own debt, which increased by $2.7bn, while the bank also reported a “significant” increase in income from its investments in Chinese financial groups Ping An Insurance, Bank of Communications and Industrial Bank.
The bank said its emerging markets business, particularly in Asia and the Middle East, helped to offset the credit market writedowns.
The writedown figures came in an interim results statement, which did not contain revenue or profits figures for the division.
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