HSBC 2011 Annual Report Download - page 92

HSBC HOLDINGS PLC
Report of the Directors: Operating and Financial Review (continued)
Geographical regions > Latin America
90
Profit/(loss) before tax by country within global businesses
Retail
Banking
and Wealth
Management17
US$m
Commercial
Banking
US$m
Global
Banking
and
Markets17
US$m
Global
Private
Banking
US$m
Other
US$m
Total
US$m
2011
Argentina ............................................. 91 107 148 – (2) 344
Brazil .................................................... 241 566 515 13 (105) 1,230
Mexico ................................................. 403 129 268 4 (178) 626
Panama ................................................. 23 59 52 3 (9) 128
Other .................................................... (55) 6 66 – (30) (13)
703 867 1,049 20 (324) 2,315
2010
Argentina ............................................. 89 90 105 – – 284
Brazil .................................................... 151 382 430 6 64 1,033
Mexico ................................................. 174 24 210 4 (11) 401
Panama ................................................. 48 57 33 2 – 140
Other .................................................... (100) 1 51 (2) (13) (63)
362 554 829 10 40 1,795
2009
Argentina ............................................. 25 86 121 – – 232
Brazil .................................................... (202) 211 493 5 3 510
Mexico ................................................. (24) 66 223 7 – 272
Panama ................................................. 69 55 24 – – 148
Other .................................................... (54) (19) 40 (1) (4) (38)
(186) 399 901 11 (1) 1,124
For footnote, see page 95.
During 2011, we made progress in the execution
of our regional strategy while also improving the
efficiency of our operations. We recruited additional
relationship managers in our CMB businesses in
Brazil to support business growth, particularly from
Business Banking and mid-market customers and the
increasing number of businesses with international
requirements. We increased our focus on sales and
customer service with the addition of relationship
managers in RBWM in Brazil, and opened 14 new
branches in Argentina to capture opportunities
arising from demographic changes and upward
social mobility.
In order to improve the risk profile of our
RBWM business we continued to reposition our
lending portfolio towards higher credit-quality
customers, notably by building long-term
relationships with customers. In Brazil, we increased
our focus on secured lending and wealth
management products.
In GB&M, our pre-tax profits increased to over
US$1.0bn in 2011 as we continued to utilise the
connectivity of the HSBC network to serve the
growing number of global corporate businesses in
Latin America. During 2011, our GB&M sales force
actively targeted our CMB customer base and
achieved strong growth in revenue compared with
2010, most notably from the sale of GB&M foreign
exchange products.
To enhance efficiency, we restructured our
regional and country support functions, and in
Mexico we consolidated the branch network,
reducing it by 43 in the last quarter of 2010 and 77
in 2011. In the second half of 2011 we completed
the sale of HSBC Afore and our retail banking
operations in Chile. As a consequence, we reduced
staff numbers by more than 1,900 in 2011.
In January 2012, we entered into an agreement
to sell our operations in Costa Rica, Honduras and
El Salvador. We expect to complete this transaction
during 2012, subject to regulatory approval.
Net interest income rose by 7% to US$7.0bn,
driven by growth in average lending balances in both
2010 and in 2011. This was mainly in CMB and
RBWM, reflecting favourable economic conditions
and growing consumer demand, partly offset by a
rise in internal funding costs on higher balances of
reverse repos and government bonds held for
trading. In CMB, we grew our average customer
lending balances, particularly in Brazil, reflecting the
favourable economic conditions, the increase in our
customer base and our investment in relationship
managers. The rise was mainly in working capital
products following marketing campaigns and new