Bank of America, the world's second-biggest bank, said on Friday that net profit from its Asia unit rose nearly 14 percent last year, driven by lower borrowing costs and a stronger Hong Kong economy. The bank, which has a market value of US $181.9 billion and is second to Citigroup Inc, said its Asian net profit rose to HK $450.9 million (US $57.8 million), compared with HK $396.2 million in 2003. The US lender has a relatively small footprint in Hong Kong - Hang Seng Bank, the local unit of HSBC Holdings Plc. earned HK $11.4 billion in 2004 - and its gains were largely driven by lower borrowing costs.
Bank of America said net interest income rose to HK $698.9 million, compared with HK $667.7 million in 2003, as interest expense fell 20 percent. The bank said it expected Hong Kong's gross domestic product to grow 4.5-5.5 percent this year - in line with government projections - and Macau's in double digits. The Hong Kong economy grew by 8.1 percent last year.
Like most globally diverse financial institutions, Bank of America is keen on establishing roots in China, and has been mentioned as a potential investor in a big mainland bank.