UK-based diversified financial organization HSBC has reported impressive financial results for 2004, as strong growth across the company and a doubling of gains on disposed assets delivered a 37% hike in profits. However, shares fell slightly as predicted targets were not quite met.
HSBC made a profit on ordinary activities before tax of $17,608 million in 2004, an increase of $4,792 million, or 37%, compared with 2003. Company directors have declared a fourth interim dividend for 2004 of $0.27 per ordinary share, making the total for the year $0.66 per share, an increase of 10% over 2003 but below the growth rate of 13% for that year.
Net interest income of $31,024 million in 2004 was $5,426 million, or 21%, higher than 2003. Other operating income of $19,563 million was $4,089 million, or 26%, higher than 2003. Although operating expenses rose, HSBC’s cost:income ratio, excluding goodwill amortization, improved to 51.1% compared with 51.3% in 2003.
Gains on disposal of investments and tangible fixed assets of $802 million were $388 million higher than 2003. The group’s total assets at December 31, 2004 were $1,277 billion, an increase of $243 billion, or 23%, since December 31, 2003.
Commenting on the results, Sir John Bond, HSBC group chairman, stated: 2004 was another good year for HSBC. The solid performance of the first six months continued and we were able to build on the record results of 2003. Our earnings growth was well diversified across all our main geographical regions and our customer groups, all of which achieved record results. Overall, our performance was driven by broadly based revenue growth of 23% and by particularly favorable credit conditions.
During the last two years we have also completed the integration of a major consumer finance business in the US and a large commercial bank in Mexico, two of the most important and successful acquisitions in our recent history. In addition we have strengthened the foundations for our future development in mainland China.
Looking forward, the chairman said: Our principal focus for 2005 is to achieve further revenue growth together with improved productivity. The opportunities available to HSBC to grow profitably have never been broader, either by geography or by customer group. The task before us now is to ensure that we respond in full.