HSBC 2006 Annual Report Download - page 33

31
Europe
Profit/(loss) before tax by country within customer groups and global businesses
Year ended 31 December
2006
US$m
2005
US$m
2004
US$m
Personal Financial Services .......................................................................... 1,909 1,932 1,621
United Kingdom .............................................................................................. 1,496 1,475 1,340
France1 ............................................................................................................. 174 223 205
Turkey............................................................................................................... 121 134 29
Other ................................................................................................................ 118 100 47
Commercial Banking ..................................................................................... 2,234 1,939 1,663
United Kingdom .............................................................................................. 1,801 1,495 1,258
France1 ............................................................................................................. 236 278 272
Turkey............................................................................................................... 50 39 25
Other ................................................................................................................ 147 127 108
Corporate, Investment Banking and Markets2 .......................................... 2,304 2,114 1,668
United Kingdom .............................................................................................. 1,299 1,186 1,021
France1 ............................................................................................................. 545 472 337
Turkey............................................................................................................... 64 92 88
Other ................................................................................................................ 396 364 222
Private Banking ............................................................................................. 805 539 438
United Kingdom .............................................................................................. 380 171 135
France1 ............................................................................................................. 22 7 (22)
Switzerland ...................................................................................................... 305 254 203
Other ................................................................................................................ 98 107 122
Other ............................................................................................................... (278) (168) 366
United Kingdom .............................................................................................. (185) (47) 477
France1 ............................................................................................................. (107) (147) (123)
Turkey .............................................................................................................. (18) – –
Other ................................................................................................................ 32 26 12
Total ................................................................................................................ 6,974 6,356 5,756
United Kingdom .............................................................................................. 4,791 4,280 4,231
France1 ............................................................................................................. 870 833 669
Turkey............................................................................................................... 217 265 142
Switzerland ...................................................................................................... 305 254 203
Other ................................................................................................................ 791 724 511
1 France primarily comprises the domestic operations of HSBC France and the Paris branch of HSBC Bank.
2 Including venture capital gains of US$457 million (2005: US$610 million; 2004: US$170 million).
Year ended 31 December 2006 compared
with year ended 31 December 2005
Economic briefing
UK GDP growth increased in 2006 to about 2.7 per
cent from 1.9 per cent in 2005. This followed a
recovery in both household and company spending.
Consumer Price Index (‘CPI’) inflation increased
through the year from 1.9 per cent in January to
3.0 per cent in December, following large increases
in the price of petrol and gas. The Bank of England
raised interest rates from 4.5 per cent to 5 per cent,
citing concerns about spare capacity, rapid money
growth and the possibility of inflation staying above
target for some time. House price inflation remained
strong but consumer spending appeared unaffected.
Secured lending continued to increase although
unsecured lending plateaued. There was evidence
that a number of households were struggling with the
burden of debt as personal insolvencies and
repossessions increased. Employment rose, although
by less than the increase in available workers as
migrant inflows remained strong and the
participation rate of UK residents in the labour force
increased. As a result, the unemployment rate
increased, contributing to constrained wage growth
throughout the year despite relatively high rates of
headline inflation.
The recovery in the eurozone economy
gathered momentum through the course of 2006.
GDP rose by approximately 2.7 per cent, the fastest
rate since 2000. Much of the improvement reflected
increases in exports and investment, as global
demand remained strong and corporate activity and
profits rose. Consumer spending remained subdued,
despite a gradual rise in employment. German