HSBC Holdings plc posts 27% net profit rise

Global banking giant HSBC Holdings plc said it is on a “clear trajectory” to meeting its profitability target for the current fiscal year, when it reported a 27 percent rise in net profit in 2011 to $16.2 billion, beating market expectations of between $15.6 billion to $17.1 billion.

The bank attributed the net profit surge to the reduction in loan impairment charges/credit risk provisions, strong revenue growth in emerging markets, and the record commercial banking segment’s pre-tax profit.

Pre-tax profit, which is a usual key metric measure to measure the bank’s profitability, rose 15 percent to $21.9 billion. Earnings per share rose 26 percent to $0.92 per share.

The bank declared a fourth interim dividend of $0.14 per share, making the total 2011 dividend $0.41 per share, representing a 14 percent jump from a year earlier.

Among the different business segments, the Commercial Banking’s pre-tax profit rose to a record high of $7.9 billion, up 31 percent from a year ago.

The Retail Banking and Wealth Management profit before tax also jumped 11 percent to $4.3 billion while the Global Banking and Markets’ pre-tax profit tumbled 24 percent to $7 billion.

The bank said on Monday it expected these markets to continue growing strongly in 2012, albeit more moderately than in 2011 amid the macroeconomic, regulatory and political uncertainties.

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