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Thursday, June 03, 2004
HSBC eyes 15% hike in net income: exec
HSBC Philippines aims to increase its net income by over 15 percent this year.
This was revealed by HSBC Philippines chief executive officer Warner Manning in an interview over the weekend.
He declined to reveal the net income of the foreign bank last year.
The bank has 21 branches in the country, including the branches for its savings bank.
He also revealed a plan to increase its consumer banking business from the present one-third of its business to 50 percent “because the opportunities are bigger” in this segment of the business.
Currently accounting for one-third of the business is its corporate business, and the remaining one-third, the institutional business, which refers to business with the government and other banks.
Manning said this growth in consumer banking would mainly be done through premier services to premier clients.
For instance, he said the bank recently launched a service wherein one could “look at the Internet through the mobile phone.”
The corporate sector would not be neglected, though, as Internet banking would be promoted for small and medium enterprises.
Manning would not specify the level of the bank’s non-performing loan ratio, but he said it could be half of the average in the Philippines or even lower than that.
“It’s very healthy,” he assured.
The bank is also currently selling both life and non-life insurance through its insurance brokerage, which started some 18 months ago.
He said another way for banks to get into insurance is to own five percent or more of a local insurance company. But HSBC decided not to take that route.
On the prospect of a US interest rate hike leading to a corresponding hike in local interest rates, he was unworried.
“We will not necessarily follow the rate hike immediately,” he said. “The CB (central bank) will (still have to) review that position going forward.”
There are concerns an increase in interest rates will discourage companies from borrowing, which will affect the growth of the economy.
However, Manning said the Philippine economy is dependent not so much on the interest rates, but more on the growth of the US economy, which is predicted to continue to improve.
In fact, he said the big improvement in the US employment statistics is the reason why the US authorities are considering a rate hike to prevent an overheating of the world’s largest economy.
AFP reported yesterday that US manufacturing activity surged last month as factory employment hit its highest level since 1973.
Manning expressed hope that with the May 10 presidential elections over, there will be “revived interest in the equities markets in the Philippines.”
He said this will have a “beneficial impact” on the economy, and he expects a steady improvement in this arena in the second half of the year. CTL
(June 3, 2004 issue)
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