HSBC, the UK’s largest bank, says it has made a $17.2bn (£8.7bn) loss on investments linked to the credit crisis. The higher than expected loss comes despite a 10% increase in profit to $24.2bn (£12.2bn) for 2007, driven by strong growth in Asia.
The bank says the global financial system came under “extraordinary strain” in 2007. HSBC chairman Stephen Green adds: “The outlook for the rest of 2008 is uncertain.”
“The economic slowdown and the credit outlook in the US may well get worse before they get better,” he added as he reported the company’s annual results today (March 3).
The credit crisis, caused by problems in the US housing market, hit HSBC’s US operations. Green says that its strategic focus on fast-growing markets had helped it to †”achieve another new high in earnings”.