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Last Updated: Monday, 28 February, 2005, 16:45 GMT
HSBC bank reveals bumper profits
HSBC bank
HSBC has had a particularly good year in the United States and China
HSBC has revealed a 37% rise in pre-tax profit to 9.6bn ($17.6bn) for 2004.

Much of the profit has been made abroad by the global bank, which operates in the UK, Europe, Asia and the Americas.

Chairman Sir John Bond said 2004 was "another good year for HSBC", which generates nearly a quarter of its earnings in the UK.

The profits come against a background of record earnings for UK banks and complaints from consumer groups that they are making "excess" profits.

Bonanza for banks

Earlier this month, Barclays reported pre-tax profits of 4.6bn, up 20% on the year before.

This was followed a couple of weeks later by Royal Bank of Scotland, which reported a 14% rise in annual pre-tax profits to nearly 7bn.

Barclays' chief executive John Varley said at the time that the bank had "caught the winds" of a very strong world economy.

HSBC's Sir John also described the economic climate as "favourable" when speaking to the BBC on Monday about HSBC profits - which are the biggest recorded by any UK bank.

He said he did not think UK banks made too much money from their customers.

"We are in 77 countries and our UK profits are no different from profits in other markets," he said.

"We make 24% of our profits in the UK but it accounts for 32% of our salary base."

We think the Chinese growth story is a very impressive one
Sir John Bond, HSBC chairman

China contribution

Sales at the company rose 23% to 26.29bn ($50.59bn), benefiting from the company's acquisition of US consumer lender Household in March 2003.

The 2004 results also included 10 months of contribution from Bank of Bermuda, which HSBC acquired a year ago.

Sir John also acknowledged the contribution of China to the bank's profits.

"We think the Chinese growth story is a very impressive one," he said.

"It has 21% of the world's population and accounts for just 4% of the world's gross national product; I think that will soon change."

Acquisition trail

Separately, the company's finance director Douglas Flint, appeared to rule out acquisitions in South Korea, where HSBC tried to acquire Korea First Bank in January.

It was pipped at the post by UK-based bank Standard Chartered, which spent 1.8bn on the deal.

But speaking to Bloomberg TV, Mr Flint said: "Korea does not look like it is going to be on the agenda for acquisitions.

"The best opportunity in Korea is very likely to come from building out what we've got."

He also seemed to rule out buying a Japanese financial business.

"We've never seen anything in Japan we were able to think made sense for us," he said.

Strike threat

HSBC shares finished the day down 2.8% at 868p after analysts said the bank's profits were at the lower end of their expectations.

The bank also faces the possibility of a strike. Trade union Amicus said it will call on UK workers at HSBC to prepare for strike action over pay and bonuses.

It said the company's pay offer will leave many staff worse off than they were last year.

"Out of 25,000 HSBC staff covered by the Amicus negotiated pay arrangements, up to 10% will get no pay rise at all this year and a further 40% will get below inflation," said Amicus.

Where HSBC is making its money

HSBC banking on global expansion
28 Feb 05 |  Business
RBS pumps up profits to near 7bn
24 Feb 05 |  Business
Barclays profits hit record level
10 Feb 05 |  Business
HSBC bank slashes 3,500 UK jobs
17 Jun 04 |  Business

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