The investment banking unit of HSBC (LON:HSBA) has grabbed a good chunk of business from its competitors during the economic crisis, and consequently should generate profits of about $6 billion annually on a regular basis, according to Stuart Gulliver, head of the global banking and markets division of HSBC.
Gulliver added that even if 2010 is a difficult year for the bank, he doesn’t foresee them dropping off to levels they experienced in 2007 or 2008. This of course means they made very significant inroads in grabbing market share from their competitors if his projections do hold out for the year.
HSBC referred to the performance of its global banking and markets unit on Monday saying in 2009 they enjoyed record profits from them of $10.5 billion, which was over three times what they generated in 2008, and far better than their former top profits of $6.2 billion they made in 2007 in the division.
Along with its garnering new business from its rivals, another key profit generator has been their emerging markets business, which has also been performing solidly for them.
Gulliver said the key in the emerging markets business started four years ago when they changed direction to focus on that revenue and profit stream rather than go head to head with the major banks on Wall Street.
Cited by Reuters, Gulliver stated concerning the emerging markets business of the bank, “The business has made $20 billion over the last three years during the worst financial crisis since the 1920s because it’s very diversified.”
For the solid performance of his unit, Gulliver was rewarded with 9 million pound bonus offered in deferred shares, in addition to his base salary of 800,000 pounds.
