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.

Bank business is also a barometer for the economy.
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