MercoPress. South Atlantic News Agency
Bank threat to quit Argentina
One of Britain's biggest banks, the Hong Kong and Shanghai Banking Corporation (HSBC), is threatening to withdraw from Argentina after full-year profits were reduced by £714 million pounds (one billion dollars) set aside against loans in the bankrupt South American country.
HSBC chairman, Sir John Bond, said that the bank would be prepared to quit Argentina, where, he said, "the situation changes from hour to hour. We may have to reassess our policy".
The bank's profits of 8.8 billion dollars compared with 10.9 billion the previous year, dropped by 14 per cent , hit by a 520 million dollar foreign currency trading loss after the Argentine Government's decision to introduce what the London Times newspaper calls "a punishing foreign exchange regime for banks". HSBC also made a general 600-million dollar provision against other loans in Argentina.
Despite the Argentine loss, the bank's shares rallied by 7.6 per cent . But experts are quote as saying "it is a fools' run, and the stock could be downgraded".
The experts say the big write-offs against Argentina were expected . Exposure to exciting emerging market growth brings heightened risks of failure. They say that HSBC's historic connection with Hong Kong could make the bank one of the earliest winners if China's new membership of the World Trade Organisation means that commercial interaction with outsiders is encouraged.
Harold Briley, MP/London
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