Nov 22, 2007 (LBO) – The Sri Lanka branch of HSBC has taken a record 1.4 billion rupee hit from bad loans which saw net profits plummeting 56 percent in the first nine months of the year, the bank’s interim accounts showed. HSBC made a specific provision of 1,414 million rupees, up from 120 million rupees from the same period last year.
Sri Lankan banks have also been reporting higher levels of bad loans, but analysts say foreign banks such as HSBC have provisioning standards that are tighter than local banks.
Interest income rose 32 percent to 11 billion rupees, though interest expenses also rose to 4.4 billion rupees from 2.9 billion rupees.
HSBC also lost 320 million rupees on foreign exchange trading compared to a 146 million profit in the same period last year.
After tax profits fell to 856 million rupees from 1,985 million.
The bank’s performing loans were flat at 69.5 billion rupees compared with 69.7 billion last year. Investments in government securities rose to 18.9 billion from 8.4 billion rupees.
The bank’s net assets were flat at 13.4 billion rupees, while gross assets rose to 123 billion rupees from 107 billion. Deposits grew to 83.7 billion rupees from 67.2 billion.