In this challenging environment, it was an impressive feat to boost return on equity, if only by two percentage points to 15.9%, while cutting the cost-to-income ratio from 51.3% to 49.4% in the year. The bank has maintained its financial strength on all fronts, in terms of capital, liquidity and breadth of earnings as key advantages. All of this was implemented on the back of a clear strategy that delivered results.
HSBC retains its position as the leading international emerging markets bank, which contributed pre-tax profit growth of more than 41% last year, rising to 60% in the first half of 2008. As for global markets and banking, the group turned in a resilient performance compared to its peers and despite write-downs.
HSBC earned itself the distinction of being the first bank to call the US crisis and management has been taking decisive action on that front. Dividend policy followed the trend of the past 15 years, with a 10% increase.
The bank’s strategy can be defined as organicled, though there have been selective transactions to enhance value. These include acquisitions in India and Taiwan, the commencement of integrated Hana HSBC Life in Korea, and an increased stake in its Vietnam operations, taking ownership to 20%.
“Although 2008 has been a testing time for all financial institutions, we have very much remained open for business,” says managing director Paul Thurston. “This is a testament to the value of HSBC’s core strengths of sound liquidity, capital strength, cost discipline and relationship banking.”
