HSBC, the international banking group, is budgeting £1.25 billion in the coming year on its technology systems, to fend off competition from online banks such as Smile.
Sir John Bond, HSBC chairman, said the intention is to make the internet an integral part of the service, work in tandem with traditional bank branches and telephone services. HSBC said 55,000 UK customers had already signed up for its TV banking service offered through Open, the digital TV home shopping channel, and that 400,000 customers bank over the Net worldwide.
Sir John stressed that the bank's aggressive internet strategy would not lead to the creation of a stand-alone bank such as Prudential's Egg, one of the rivals in the market. HSBC will roll out online services in the UK, continental Europe and the United States throughout 2000.
Group pre-tax profit was up 21 per cent rise in 1999: attributable profit was up 25 per cent. Trading income from HSBC securities and capital markets operations suffered from provisions made against bonds issued by a Korean corporation, understood to be Daewoo. Although performance in the Middle East and Latin America fluctuated, the group's operating profits, up seven per cent, were the best in the company's history.
"Our capital position is strong,” said Sir John, “and the internal generation of capital within the group is exceptional."
HSBC will pay a dividend up 12pc to 20.7 cents on 27 April, at the exchange rate on 18 April 18.