Europe's biggest bank HSBC has written off $3.2bn (�1.6bn) in the first three months of 2008 as a result of its exposure to the US sub-prime market. The writedowns, which are lower than the total written off in the final quarter of 2007, are in line with what the bank had predicted. HSBC now stands behind Citibank, UBS and Merrill Lynch as the banks with the largest value of writedowns. It also reported a further $2.6bn of writedowns in its global banking arm. 'Encouraged' The bank said that profits in the US had fallen but that other markets remained strong.  | MAIN CREDIT LOSSES SO FAR Citigroup: $40.7bn UBS: $38bn Merrill Lynch: $31.7bn HSBC: $15.6bn Bank of America: $14.9bn Morgan Stanley $12.6bn Royal Bank of Scotland: $12bn JP Morgan Chase: $9.7bn Washington Mutual: $8.3bn Deutsche Bank: $7.5bn Wachovia: $7.3bn Credit Agricole: $6.6bn Credit Suisse: $6.3bn Mizuho Financial $5.5bn Bear Stearns: $3.2bn Barclays: $3.2bn Source: Bloomberg and company reports |
The latest writedown takes the amount of bad debt incurred by the bank in the US to �7.5bn over the past year. But growth in Asia helped counter the big hit taken on US home loans - meaning profits were still bigger than the same period a year earlier. "I am encouraged by the way we have increased pre-tax profits in every one of the major countries in which we operate in Asia-Pacific, the Middle East and Latin America," said group chief executive, Michael Geoghegan. Private and commercial banking divisions saw record profits in the quarter, he added. The comments, as well as the writedowns being no worse than expected, helped push HSBC shares up in morning trading. Mr Geoghegan also dismissed speculation that the firm may need to sell off some of its assets, saying he saw "no need to slim down".
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