HSBC 2004 Annual Report Download - page 91

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Operating expenses, before goodwill
amortisation, of US$521 million, increased by 2 per
cent, mainly due to restructuring costs in India and
Singapore.
There was a net release of US$5 million for bad
and doubtful debts compared with a net charge of
US$26 million in 2002, at constant exchange rates. A
specific provision raised against a New Zealand
corporate customer in 2002 was recovered during the
year.
HSBC’s Private Banking activities in the rest
of Asia-Pacific reported pre-tax profit, before
goodwill amortisation, of US$36 million in 2003, an
increase of 46 per cent, compared with 2002. This
was achieved through strong growth in dealing
profits, which rose by 55 per cent to US$38 million,
and more than compensated for a reduction of 7 per
cent in net interest income.
The fall in net interest income reflected
significant income earned in 2002 from the
deployment of liquidity into longer dated assets
which benefited from the fall in short-term interest
rates. With the flattening of the yield curve this was
not repeated in 2003.
Dealing profits benefited from a higher volume
of client transactions in the debt securities and
derivatives markets and increased sales of
client-tailored structured products.
Operating expenses, excluding goodwill
amortisation, increased by 25 per cent to
US$47 million, primarily to support business
growth.