HSBC profit doubles to 6.76 billion dollars
HSBC said on Monday that net profits more than doubled to 6.76 billion dollars (5.17 billion euros) in the first half of 2010 as the global banking giant slashed its bad debt provisions.
The profit after tax figure for the six months to June 30 compared with net earnings of 3.34 billion dollars for the first half of 2009, the British group announced in a results statement.
"As we focus on building a high quality asset base for the future, it is encouraging that loan impairment charges now stand at their lowest levels since the start of the financial crisis," HSBC chief executive Michael Geoghegan said in the earnings release.
"They almost halved overall, reducing by 6.8 billion dollars to 7.5 billion dollars year-on-year.
"This reflects the benefit of more stable economic conditions for many of our customers and follows our actions, begun before the crisis, to reduce exposure to unsecured lending outside our key relationships, to exit unprofitable business lines and to tighten underwriting standards for new business," added the boss of Europe's biggest bank.
HSBC also revealed that pre-tax profits more than doubled to 11.1 billion dollars in the first half, comfortably beating analyst expectations of earnings totalling 9.3 billion dollars.
"Despite increasing economic uncertainty towards the end of the period, we saw appetite for credit grow steadily, especially among our business customers," said Geoghegan.
"We grew loans and advances to customers in all regions and by four percent overall, compared with the end of 2009. Geographically, the strongest growth was in Asia, where we grew lending by 15 percent."
HSBC, founded in Hong Kong and Shanghai in 1865, sees Asia as the group's most important region strategically. Earlier this year Geoghegan relocated to Hong Kong from London, although the group remains headquartered in the British capital.
The bank said that across Asia, pre-tax profits increased by 20 percent to 5.6 billion dollars in the first half.
"The contribution of Asian profits generated outside Hong Kong grew to 50 percent, underlining our growing presence across the region," said Geoghegan.
Following release of the results, the share price of HSBC showed a gain of 4.46 percent to 674.8 pence in morning trade on London's benchmark FTSE 100 index, which was up nearly two percent.
HSBC had added that it was to pay an interim dividend of 16 cents per share.
© 2010 AFP