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HSBC profits up as bad debts ease
LONDON, England (Reuters) -- Europe's biggest bank HSBC Holdings Plc reported a 20.6 percent rise in annual pre-tax profit to $9.65 billion on Monday, at the bottom end of expectations, as charges for bad debts eased. HSBC, based in Britain but with operations right round the globe, said prospects for 2003 were hard to call amid economic doubts, fears of a war in Iraq and tumbling stock markets. "During the current uncertainties, HSBC's policy of financial strength and its earning power are competitive advantages," the bank said in a statement. Its shares stood 0.37 percent higher at 686-1/2 pence in early trade. Pre-tax profits, after goodwill amortization, rose to $9.65 billion. Six analysts polled by Reuters had forecast profits between $9.65 billion and $10.03 billion, with a consensus at $9.82 billion. HSBC boosted its total year dividend by 10.4 percent to 53 cents and said it proposed to pay quarterly dividends from the second half of this year. Charges for bad debts fell $716 million to $1.32 billion. The bank said it expected to complete its takeover of U.S. consumer finance firm Household International in the first quarter of this year. The deal, worth $14 billion when announced, raises HSBC's profile in the world's biggest consumer market, but comes as the U.S. economy is stuttering. HSBC has been looking to diversify its earnings to cope with an economic downturn in its key historic market of Hong Kong and tough competition in Britain. Citigroup Inc, the world's biggest financial services firm, has also had to contend with global economic uncertainty and reported a fall in fourth-quarter profit in January. HSBC is the last of Britain's "Big Four" banks to report annual results. Its rivals have produced mixed results. HSBC shares have outperformed the DJ Stoxx European bank sector index by about nine percent over the past year. Copyright 2003 Reuters. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.
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