Pre-tax profit of 2010 beat analysts' estimates at $3.6 billion, compared with a $10.3 billion loss in 2009. Total income grew 3% to $38.9 billion, boosted by core business income, which grew 7% for the year.
Though higher funding costs piled pressure, prudent lending improved net interest margin to 2.1% from 1.77% in 2009. The 45% reduction in impairment charge to $21.5 billion improved overall profitability. Lower operating expenses improved the cost-to-income ratio to 46.2%, compared with 50.7% in 2009.At the end of 2010, Tier 1 ratio was 11.6% and capital ratio was 15.2%. On average, analysts expect the stock to gain 71% over the next one year.