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HSBC profits jump to £13.8bn

Europe's largest bank posts profits up 15% in 2011, a "year of major progress".

HSBC Holdings, the biggest bank in Europe, made annual profits of £13.8 billion ($22bn) in 2011, making it the most profitable Western bank for the year. The 15 per cent increase on 2010 is one of the largest-ever profit rises among British companies.

The bank operates in 80 countries around the world and makes approximately 90 per cent of its money outside of Britain. Despite the eurozone debt rise, HSBC's UK pre-tax profits rose 17.2 per cent on the year to £1.5 billion. The investment banking division took a hit, sustaining losses of 24 per cent. However, profits in the emerging markets -- Asia, Latin America and the Middle East and North Africa -- rose 12 per cent on 2010.

Stuart Gulliver, group chief executive of HSBC, said:

2011 was a year of major progress for HSBC. We gained traction in our strategy designed to simplify the structure and improve the management and control of the group.

I am pleased with our progress, but there is a lot more to do and we remain focused on delivering our targets.

HSBC's profit increase comes in major contrast to the year-end results of other British banks. Barclays profits fell 3 per cent in 2011 to £5.9bn. The Royal Bank of Scotland, 82 per cent of which is owned by the British public, posted a loss of £2bn on 2011; Lloyds Banking Group -- likewise owned 41 per cent by the taxpayer -- widen its annual loss by over £3.5bn.

Gulliver is currently overseeing a reduction programme across the bank to slash annual costs by £2.2bn. The bank has already cut 11,000 jobs and 30,000 are expected to be lost in total.

The latest gains posted by HSBC come in just slightly behind those made in the group's record profit year. In 2007, a year before the global financial crisis, the banking giant made profits of £15.1bn ($24bn).

Alice Gribbin is a Teaching-Writing Fellow at the Iowa Writers' Workshop. She was formerly the editorial assistant at the New Statesman.