HSBC Holdings reported record profits for a British bank of $21 billion on Monday, up 11 percent on the year and above analysts' expectations, as strong emerging markets offset higher spending at its investment bank.
Europe's biggest bank said it made profit of $20.97 billion before tax in 2005, up from $18.94 billion in 2004 and above an average profit forecast of $20.56 billion, according to 13 analysts polled by Reuters.
HSBC, whose operations span 77 countries, said record results in Mexico, Turkey and the Middle East spearheaded growth.
Profits dipped in its investment banking division as it paid out higher bonuses and spent more building the business, but investors were encouraged that spending growth would now slow.
"It's good to see that they are optimistic on improving productivity in the investment bank. Cost growth there has been a drag in the recent past, so that's a positive," said Victoria Stewart, fund manager at Royal London Asset Management.
"It's clear that they're very excited about Asia and emerging markets growth. There's a strong message coming out that they see a lot of opportunities because of increased global trade," she added.
At 1150 GMT, HSBC's London-listed shares were up 1.5 percent at 990 pence, valuing the bank at about 112 billion pounds ($196 billion), the world's third biggest.
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