HSBC says profit down as bad loans rise in US
HSBC Holdings Plc, Europe's biggest bank by market value, reported a 29 percent drop in first-quarter profit as bad loans rose in the United States and said emerging markets may grow more slowly this year.
Net income for the six months ended June 30 fell to $7.7 billion, or 65 cents a share, from $10.9 billion, or 94 cents, a year earlier, the London-based company said yesterday in a statement. HSBC put $10.1 billion this year into loan-loss reserves, adding to charges of $17.2 billion in 2007 and $10.6 billion in 2006 for bad loans. While the bank's profit rose in Europe, Latin America and most of Asia, Chairman Stephen Green said the outlook is "highly challenging" as emerging markets grow "with less momentum" than before.
"There's some pretty negative news," said Alan Beaney, investment head at Principal Asset Management Ltd in Sevenoaks, England, which manages $2 billion including HSBC stock. "Asia, frankly, is slowing as was to be expected, and the US took a hit."
