HSBC has reported a 10% in pre-tax profit for 2007 despite its significant exposure to the US credit crunch.
In its full year results published today, the global banking giant revealed that pre-tax profit had increased to £12.2bn for the 12 months to December 31 2007, up from £11.1bn in 2006.
It follows the revelation that the group’s American arm has suffered writedowns as a result of the credit crunch worth £5.85bn last year.
Stephen Green, chairman of HSBC, says: “Our North American results continue to be adversely affected by high loan impairment charges as we respond to the impact on our portfolio of credit deterioration arising largely from the housing market weakness in the US.”
The bank says it will focus largely on emerging markets in the coming months while focussing on building global franchises in mature markets.
Green adds: “2008 is likely to be a year of caution in the financial sector until liquidity, transparency and the proper pricing of risk return to financial markets.
“The fundamentals of the group are very strong. The deleveraging of the financial system clearly plays to our strengths, given our conservative balance sheet and international presence. There can be few banks in the world that are better positioned to withstand market turbulence and grasp strategic opportunities.”