Monday May 12, 10:37 AM
HSBC profits rise despite $3.2 bln write-off
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LONDON (AFP) - Global bank HSBC said Monday that first-quarter profits climbed, despite writing off an additional 3.2 billion dollars (2.07 billion euros) from its exposure to the US subprime housing market slump.
"HSBC has made a strong start to the year despite the turbulence in global financial markets. In the first quarter of 2008, HSBC's profit was ahead of the equivalent period last year," it said in a trading update.
Europe's biggest bank added that the subprime write-down was in line with the group's forecasts and was lower than the 4.6 billion dollars that was written off in the fourth quarter of 2007.
The bank (NASDAQ: TBHS - news) said pre-tax profits advanced in all major emerging markets in Asia-Pacific (002790.KS - news) , the Middle East and Latin America but it gave a downbeat outlook for 2008.
"The outlook for the rest of the year remains unusually difficult to foresee in the current environment," said HSBC chairman Stephen Green.
"It seems increasingly likely that the US will enter a recession in 2008, the length and depth of which is uncertain," he said.
"The timing of any recovery in the US housing market, which is likely to be the primary stimulus in restoring confidence to the US economy, is also unclear."
HSBC said that profits at its US division sank in the first quarter "as a result of higher consumer finance loan impairments and additional write-downs."
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