Banking giant HSBC said today that its net profit more than doubled to $13.16 billion (€9.56 billion) last year as bad debts plunged to the lowest level since 2006.
HSBC said that pre-tax profits soared by nearly 170% to $19 billion in 2010, while loan impairments and other credit risk provisions fell by 47% to $14.04 billion. Group revenues increased by 3.1% to $68.3 billion last year.
Market expectations, however, had been for net earnings of $14.02 billion, with the bank's shares suffering as a result when they fell short.
'Underlying financial performance continued to improve in 2010,' HSBC's chief executive Stuart Gulliver said.
'All regions and customer groups were profitable, as Personal Financial Services and North America returned to profit,' added Gulliver, HSBC's former head of investment banking who replaced Michael Geoghegan last month.
HSBC is headquartered in London but the group was founded in Hong Kong and Shanghai in 1865 and the bank regards Asia as its most important region. The group said it continued to draw strength from fast-growing emerging markets.
'Credit experience continued to improve, as a result of a stronger global economy and our actions to reduce balance sheet risk,' Gulliver said.
'As a globally-connected bank with a growing presence across the world's faster-growing regions, HSBC also benefitted from higher trade volumes and strong momentum in emerging economies, especially in Asia,' he said.
Asia contributed the largest proportion to underlying pre-tax profits, while the contributions made by Latin America and the Middle East also increased.
'Together with our conservative management of the balance sheet, this improved performance allowed us to concentrate on serving our customers and to further strengthen our capital position,' the bank's CEO said.
