HSBC 2009 Annual Report Download - page 139

137
Profit before tax
2009 2008 2007
Latin America US$m US$m US$m
Net interest income .......................................................................................... 5,573 6,458 5,576
Net fee income ................................................................................................. 1,729 2,167 2,153
Net trading income .......................................................................................... 848 701 548
Changes in fair value of long-term debt issued and related derivatives ......... –– –
Net income from other financial instruments designated at fair value ........... 495 364 320
Net income from financial instruments designated at fair value .................... 495 364 320
Gains less losses from financial investments .................................................. 168 176 253
Gains arising from dilution of interests in associates ...................................... – – 11
Dividend income .............................................................................................. 11 20 9
Net earned insurance premiums ...................................................................... 1,900 1,717 1,594
Other operating income ................................................................................... 133 300 228
Total operating income ................................................................................. 10,857 11,903 10,692
Net insurance claims incurred and movement in liabilities
to policyholders .......................................................................................... (1,833) (1,390) (1,427)
Net operating income before loan impairment charges and other
credit risk provisions ................................................................................ 9,024 10,513 9,265
Loan impairment charges and other credit risk provisions ............................. (2,526) (2,492) (1,697)
Net operating income .................................................................................... 6,498 8,021 7,568
Total operating expenses ................................................................................. (5,375) (5,990) (5,402)
Operating profit ............................................................................................. 1,123 2,031 2,166
Share of profit in associates and joint ventures ............................................... 1 6 12
Profit before tax ............................................................................................. 1,124 2,037 2,178
%
%
%
Share of HSBC’s profit before tax .................................................................. 15.9 21.9
9.0
Cost efficiency ratio ........................................................................................ 59.6 57.0
58.3
Year-end staff numbers (full-time equivalent) ................................................ 54,288 58,559 64,404
Balance sheet data41
At 31 December
2009 2008 2007
US$m US$m US$m
Loans and advances to customers (net) ........................................................... 47,629 42,287 47,923
Loans and advances to banks (net) .................................................................. 18,608 14,572 12,675
Trading assets, financial assets designated at fair value, and
financial investments ................................................................................... 28,779 18,753 24,715
Total assets ...................................................................................................... 115,967 102,946 102,649
Deposits by banks ............................................................................................ 5,421 5,598 4,092
Customer accounts ........................................................................................... 72,889 59,443 61,292
For footnote, see page 149.
All commentaries on Latin America are on an underlying basis unless stated otherwise.
2009 compared with 2008
Economic briefing
A mixture of weak external demand and the
disruption caused by the H1N1 virus contributed to a
substantial deterioration in economic conditions in
Mexico during the first half of 2009. The period of
recession ended decisively as the economy improved
strongly during the third quarter of the year, but the
previous sharp decline in activity had left GDP some
6.2 per cent below the comparable figure in 2008.
The annual CPI rate continued to moderate, falling
from 6.5 per cent in December 2008 to 3.6 per cent
in December 2009. In response to the deterioration
in economic conditions, the Bank of Mexico cut its
overnight interest rate by 375 basis points during the
first seven months of 2009 to 4.5 per cent by the end
of the year.
The Brazilian economy experienced a mild
contraction during the early months of 2009 but