Nerdy Note Discussion: HSBC earns more than Cameroon

HSBC earns more than Cameroon

Last year, HSBC Bank made a worldwide profit of $24bn (approx £12.2bn). This is more than the total national income of the entire country of Cameroon, which is $18bn (approx £9.1bn). Cameroon has a population of over 18 million people (more than Wales, Scotland and Northern Ireland added together).
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Comments

  • This is not really a sensible discussion point at all, because it calls for comment on the profit figure alone. Maybe HSBC employs more capital than does Cameroon such that its return on capital employed is less than Cameroon's? In which case, Cameroon's 18 million population is getting the short straw.
  • gmtechnick
    gmtechnick Posts: 9 Forumite
    I have no problem with banks making profits, even large profits, as long as they do it through honest trading. What gets my goat is that they are all still making profits, but putting the sob sob story on the consumer and the gonvernment so they get special concessions and securities.
    Just because they may have to reduce dividends to shareholders doesnt mean they need assistance. They could write off the bulk of their bad lending and still be generating a profit on the core of their business. Even Bradford & Bingley are making a profit still.
    It was the same a few years back when M&S hit bad times. Sure, it was a wake up call and they had to do some big changes, but THEY NEVER MADE A LOSS.
    Try running a small company like me and see how little help you get.
  • ujb_98
    ujb_98 Posts: 37 Forumite
    This is not really a sensible discussion point at all, because it calls for comment on the profit figure alone. Maybe HSBC employs more capital than does Cameroon such that its return on capital employed is less than Cameroon's? In which case, Cameroon's 18 million population is getting the short straw.

    Agreed that this is a pointless discussion point.
  • ..I've been reading about Cameroon's economy in Tim Harford's book, the Undercover Economist (recommended). I think this fact says as much about Cameroon's poor economy due to corruption asit does about HSBC'c ability to generate profit.
  • When you look at company profit you should measure it against the company's market capitalization. HSBC's capital (shares) is about £100 billion so it made about 12% profit on that capital. Surely if any of us invested £100 we'd like to make about £12 a year on it?
  • MSE_Martin
    MSE_Martin Posts: 8,272
    First Post First Anniversary Combo Breaker
    Money Saving Expert
    This is not really a sensible discussion point at all, because it calls for comment on the profit figure alone. Maybe HSBC employs more capital than does Cameroon such that its return on capital employed is less than Cameroon's? In which case, Cameroon's 18 million population is getting the short straw.

    The note was a nerdy note - a simple interesting fact of comparing numbers... the discussion is anything based around that... in fact I found your point above on relevance and comparisons quite an intesting discussion point :)

    Martin
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
    Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.
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  • So what ? This statistic has been presented without qualification in order that the uninformed may become righteous about it. Take the profit figure in proportion to the billions of pounds worth of assets on the bank's balance sheet and you will come up with a "profit margin". This is considerably lower than most people would ever imagine.
  • MSE_Martin
    MSE_Martin Posts: 8,272
    First Post First Anniversary Combo Breaker
    Money Saving Expert
    So what ? This statistic has been presented without qualification in order that the uninformed may become righteous about it. Take the profit figure in proportion to the billions of pounds worth of assets on the bank's balance sheet and you will come up with a "profit margin". This is considerably lower than most people would ever imagine.

    No the statistic has been presented as a 'Nerdy Note' to show people the size and scale of things... it is just that... there is no qualification as that's not what nerdy notes are... glad to see it interested you enough to write about it though.

    I am not opposed to bank profits - never have been as you'll see here http://blog.moneysavingexpert.com/2008/05/20/i-didn%E2%80%99t-say-that-part-1%E2%80%A6-things-people-assume-i-think-but-i-don%E2%80%99t/. And that's not the agenda of the note :)

    Martin
    Martin Lewis, Money Saving Expert.
    Please note, answers don't constitute financial advice, it is based on generalised journalistic research. Always ensure any decision is made with regards to your own individual circumstance.
    Don't miss out on urgent MoneySaving, get my weekly e-mail at www.moneysavingexpert.com/tips.
    Debt-Free Wannabee Official Nerd Club: (Honorary) Members number 000
  • Punter
    Punter Posts: 2 Newbie
    I am not at all surprised that HSBC made so much profit, what is surprising is that they made it without producing anything at all. They, along with all the other banks in the world, borrow the money they have in their vaults from the people. The central banks of the world (and their puppet Governments) then give them the authority to lend as much as 33 times what they have in their vaults back to the people, thus receiving interest on money that does not exist.

    Bear in mind the declared profit of the banks represents only a small fraction of the money they actually take from the people (excluding money deposited) the bulk of which is spent on salaries, advertising, real estate etc.

    This subject is too vast and complicated to deal with here, anyone interested in pursuing this topic should follow the links below:

    1. Go to Google Video and enter the following search term: 'America: Freedom to Fascism', while this video (possibly banned in the US) deals in part with the purported illegality of income tax in the US, the sections that relate to the world banking system are enlightening.

    2. Search on any engine with the term 'Fractional Reserve Banking', an exquisite scheme invented by bankers for bankers as a mechanism for extracting the maximum amount of wealth created by the producers of the real wealth in any country and diverting it into the coffers of the bankers.
  • crossleydd42
    crossleydd42 Posts: 1,065 Forumite
    This is the sort of thing which the Press like to throw at the public - I recall that BT was castigated years ago for making £90 per second or something similar. I'd've been surprised if it hadn't, since it was one of the largest companies in the UK. Conversely, in Maggie Thatcher's time, there was equally comment about British Steel losing £1m per day! Thank God she privatised it and stopped the drain on the taxpayer.
    "Some say the cup is half empty, while others say it is half full. However, this is skirting around the issue. The real problem is that the cup is too big."
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