HSBC 2003 Annual Report Download - page 77

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from the success of the Hermitage Fund, which
offered clients access to Russian investment
opportunities. In France, fee income was affected by
lower stock market indices while interest arbitrage
activities on securities boosted net interest income at
the expense of dealing income. The latter was further
undermined by mark-to-market losses.
Dealing profits fell by 13 per cent compared
with 2001, mainly in France and HSBC Guyerzeller,
reflecting difficult market conditions.
Underlying operating expenses excluding
goodwill amortisation were in line with last year.
The credit for provisions for bad and doubtful
debts in 2002 was smaller than in 2001, when a
larger reduction in general provisions was booked
following a reassessment of provisions required.
Amounts written off fixed asset investments
were higher than last year following a write down of
a specific debt instrument of a company in the
telecommunications sector.
The share of loss in associated undertakings of
US$10 million in 2002 reflected a drop in the value
of a partially owned private equity company.
The gain on disposal of investments and tangible
assets increased to US$48 million. The increase
reflected debt instruments sold during the year and
the liquidation of a Russian Recovery fund
established in 2000 to manage previously written
down Russian debt instruments.