Shares in HSBC fell by 2.3 per cent in morning trading on Monday, after the London-based bank reported a 6 per cent fall in underlying profits to $17.7bn for 2011. A strong rise in profits from emerging markets, especially Asia and Latin America, was not enough to offset worse-than-expected earnings in Europe and the US.
HSBC – which put a photo of a Chinese ship unloading machinery in Brazil on the front of its annual report and accounts for 2011 – could hardly be making a stronger commitment to emerging markets as it strives to meet earnings and efficiency targets. But its approach is more hard-headed than the friends-with-everyone, “world’s local bank” strategy of old.
It was a dismal year in developed markets for the bank. Underlying profits in Europe fell from $4.38bn in 2010 to $1.72bn in 2011, a fall of 61 per cent. In North America, a profit of $285m in 2010 was followed by a net loss of $870m last year (caused largely by adjustments of $970m).
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