ECONOMY
HSBC PROFIT HITS $11.1BN AS BAD DEBTS FALL
Baku, August 3 (AZERTAC). Pre-tax profit more than doubled at HSBC in the first six months of the year as bad debts fell to the lowest level since the start of the financial crisis and its investment banking division revealed a surprisingly resilient performance.
Group pre-tax profit rose to $11.1 billion from $5.02 billion a year ago. HSBC was profitable in every region except the US, where it posted a loss of around $80 million.
Douglas Flint, finance director, said on Monday the profit growth had been driven by the bank`s retail and commercial businesses, which made a profit of about $4.3 billion in the first half compared with around $1.2 billion a year ago.
The personal financial services business returned to profit for the first time in two years, driven by a better performance in the US.
While the North American business still made a loss, this was sharply lower than a year ago.
HSBC said the division, which had been ravaged by losses on subprime loans, was boosted by a marked fall in loan impairments and a recovery in its core businesses. HSBC also sold its $4.3 billion US car loan portfolio.
Across the bank, loan impairment charges fell to $7.5 billion in the first six months, the lowest level since the financial crisis began. A year ago, impairments were almost $14 billion.
HSBC said it had increased lending in the UK and was "very much open for business". However, it hit out at an idea mooted by the government to force more banks to sign up to lending targets.
"Targets are difficult to formulate," said Mr Flint.
As well as a strong retail performance, Mr Flint said the investment banking division had the "second best ever half-year results".
Profits from the global banking and markets (GBM) business were $5.6 billion, down around 13 percent from an exceptional first half last year but still robust compared with the sharp falls suffered by rival banks.
Mr Flint cautioned, however, that momentum in this business would be likely to stall in the second half of the year.