HSBC Reports 42% Rise in 2d-Half Profit
LONDON - HSBC Holdings PLC, Europe's largest bank by market value, said second-half profit rose 42% as it set aside less money for potential loan losses because of the recovery in Asia.The result included a 14% gain in net interest income over the second half of 1998 for the banking company's North American units, to $1.69 billion.
Overall net income rose to $2.7 billion, from $1.9 billion in the second half of 1998.
While that beat analysts' forecasts, HSBC's shares fell 0.4% on concern that higher interest rates may hold back earnings this year. Profit was little changed in the second half from the first.
A rebound in Asian economies, notably Hong Kong, where HSBC controls the two biggest banks, made it easier for borrowers in 1999 to pay back loans and fueled demand for insurance, mutual funds, and other services.
HSBC set aside $2.1 billion to cover problem loans in 1999, $564 million less than in the previous year. That helped full-year profit rise 25%, to $5.41 billion, or 65 cents a share. Analysts had forecast a 23% increase.
HSBC last year incurred a $115-million restructuring charge related to its $10.3-billion acquisition of Republic New York Corp. and its European affiliate. HSBC said in May it would pay a one-time reorganization charge of $450 million, spread over 1999 and 2000.
- Bloomberg News
Royal Bank's Shareholders Back Natwest Deal
EDINBURGH, Scotland - Royal Bank of Scotland Group PLC said its shareholders approved the $30.3 billion cash-and-stock takeover of National Westminster Bank PLC.Royal Bank would become the United Kingdom's biggest corporate lender, the second-largest retail bank behind Lloyds TSB Group PLC, and Europe's seventh-biggest bank if the deal closes.
Natwest shareholders accepted Royal Bank's hostile offer on Feb. 14 instead of a rival bid from Bank of Scotland, ending Britain's biggest banking takeover battle.
- Bloomberg News
Lloyds' Buyout of Scottish Firm Approved
EDINBURGH, Scotland - Lloyds TSB Group PLC's takeover of Scottish Widows Fund & Life Assurance Society won approval Monday by Scotland's Court of Session.The Edinburgh-based Scottish Widows said it would become part of the Lloyds TSB Group, Europe's second-biggest bank by market value, on March 3.
Scottish firms owned by their customers, such as Scottish Widows, need Court of Session approval to become publicly traded.
Scottish Widows policyholders voted Dec. 22 to accept a $10.6 billion cash takeover offer from Lloyds TSB Group PLC, ending 184 years of independence for Scotland's fifth-biggest company.
- Bloomberg News
Credit Suisse Hires Leveraged Finance Exec
NEW YORK - Credit Suisse First Boston, the securities arm of Credit Suisse Group, said it named Doug Cruikshank director in the leveraged finance group.Mr. Cruikshank, previously a vice president in the leveraged finance unit at J.P. Morgan & Co., will be responsible for marketing leveraged finance products, including arranging high-yield bond, bank, and bridge financing for corporate clients.
Before joining J.P. Morgan in 1992, Mr. Cruikshank worked in corporate finance at BT Securities Corp.
- Bloomberg News
