HSBC Holdings PLC reported Monday that profits jumped 26.8% last year, to $7.5 billion, as charges from problem loans were reined in and acquisitions boosted revenue.
Per-share earnings rose 17%, to 76 cents, the London-based banking giant said.
HSBC took a $932 million charge for troubled loans last year, 18.2% less than in 1999.
The yearend 1999 purchases of Republic New York Corp. and Safra Republic Holdings SA and last Julys purchase of Credit Commercial de France helped boost revenue, the company said.
In a conference call Monday, executives said they plan to improve HSBCs revenue mix by expanding its fee-based businesses and deemphasizing loans.
Forty-three percent of the balance sheet was deployed in loans and advances to customers, but the company has been paring back the lending business for some time, executives said. About 18% of the loan portfolio is invested in North America, but only a small percentage of that is highly leveraged, they said.
The company also said it will continue its focus on asset management by targeting wealthy investors. This strategy was illustrated by HSBCs acquisition of Republic, which had a large private banking component.
We comb the world looking for pockets of wealthy people, said Sir John Bond, chairman of HSBC, which has 442 U.S. branches, mainly in New York, and is the third-largest global financial services company by market capitalization.
Rolf E. Breuer, chairman of Deutsche Bank AG, this month announced a similar strategy for his company. Mr. Breuer said it would pursue acquisitions in asset management or private banking, rather than investment banking.
