HSBC 2007 Annual Report Download - page 113

111
Profit before tax
Year ended 31 December
2007 2006 2005
Latin America US$m US$m US$m
Net interest income .......................................................................................... 5,576 4,197 3,342
Net fee income ................................................................................................. 2,153 1,630 1,191
Net trading income .......................................................................................... 548 537 537
Net income from financial instruments designated at fair value .................... 320 237 186
Gains less losses from financial investments .................................................. 253 84 80
Gains arising from dilution of interests in associates ...................................... 11 – –
Dividend income .............................................................................................. 9 6 5
Net earned insurance premiums ...................................................................... 1,594 1,076 871
Other operating income ................................................................................... 228 91 286
Total operating income ................................................................................. 10,692 7,858 6,498
Net insurance claims incurred and movement in liabilities to policyholders . (1,427) (1,023) (792)
Net operating income before loan impairment charges and other
credit risk provisions ................................................................................ 9,265 6,835 5,706
Loan impairment charges and other credit risk provisions ............................. (1,697) (938) (676)
Net operating income .................................................................................... 7,568 5,897 5,030
Total operating expenses ................................................................................. (5,402) (4,166) (3,426)
Operating profit ............................................................................................. 2,166 1,731 1,604
Share of profit in associates and joint ventures ............................................... 12 4 –
Profit before tax ............................................................................................. 2,178 1,735 1,604
%
%
%
Share of HSBC’s profit before tax .................................................................. 9.0 7.9
7.7
Cost efficiency ratio ........................................................................................ 58.3 61.0
60.0
Year-end staff numbers (full-time equivalent) ................................................ 64,404 64,900 55,600
Balance sheet data7
At 31 December
2007 2006 2005
US$m US$m US$m
Loans and advances to customers (net) ........................................................... 47,923 35,791 21,681
Loans and advances to banks (net) .................................................................. 12,675 12,634 8,964
Trading assets, financial instruments designated at fair value, and
financial investments ................................................................................... 24,715 20,497 16,945
Total assets ...................................................................................................... 99,056 80,771 55,387
Deposits by banks ............................................................................................ 4,092 5,267 2,598
Customer accounts ........................................................................................... 61,292 50,861 30,989
For footnote, see page 130.
Year ended 31 December 2007 compared
with year ended 31 December 2006
Economic briefing
In response to fluctuations in export demand from
the US, economic growth in Mexico moderated
during the course of 2007, with GDP rising an
estimated 3.1 per cent during the year, compared
with 4.8 per cent in 2006. Inflationary pressures
remained significant throughout 2007, with
consumer price inflation averaging 4 per cent, driven
by increases in international prices of commodities,
which affected domestic food prices in the core
index. As a result, the Bank of Mexico raised its
overnight interest rate by a total of 50 basis points,
and has maintained its restrictive monetary policy
despite reductions in interest rates by the US Federal
Reserve.
The Brazilian economy expanded strongly in
2007, with GDP expected to have grown by 5.4 per
cent compared with 3.7 per cent in 2006. As in 2006,
growth was driven by domestic demand, with private
consumption rising considerably. As a consequence,
the average unemployment rate fell to 9.3 per cent in
2007 from 10 per cent in 2006. After declining to
3.1 per cent at the end of 2006, the annual rate of