HSBC 2007 Annual Report Download - page 108

HSBC HOLDINGS PLC
Report of the Directors: Business Review (continued)
North America > 2006 / Profit/(loss) before tax by customer group
106
HSBC businesses also contributed to the increased
level of fee income.
A one-off gain of US$9 million arose from a
partial disposal of a holding in the Hermitage Fund,
offsetting the non-recurrence of US$9 million of
income following the sale of a number of small trust
businesses in 2005.
Client assets increased by 5 per cent to
US$43 billion, with net new money of US$5 billion.
This included a significant contribution from the
higher fee-earning discretionary SIS and CIS
products in which the value of client assets rose to
US$1.4 billion.
Operating expenses of US$355 million were
10 per cent higher than in 2005. This rise was
primarily attributable to hiring front office Private
Banking staff and fee-earning staff within WTAS.
In Other, movements in the fair value of own
debt and associated swaps resulted in losses of
US$128 million in 2006, compared with profits of
US$401 million in 2005.
Business expansion led to higher transaction
volumes, which resulted in increased utilisation of
IT systems and solutions. Branch expansion, the
integration of Metris, and the launch of new products
also contributed to an 8 per cent increase in costs and
income at the group’s North American technology
centre. In hsbc.com, accrued costs associated with
the development of HSBC’s second generation
internet banking platforms were recharged to other
customer groups, which resulted in higher operating
income.