08-02-2010, 07:11 PM
Direct Action Resistance Fighter
Joined: Aug 2006
HSBC profits more than double to $11.1bn
Quote:HSBC said losses on loans that have turned sour fell $6.4bn to $7.5bn, their lowest level since the financial crisis began.
The results pushed shares in the bank up 5pc in afternoon trading, boosting the sector and the FTSE 100. Most analysts had been expecting pre-tax profits around $9bn.
HSBC expects global demand to be constrained by "anaemic growth in various Western nations" but remains bullish about the outlook for emerging markets, which led the global recovery in the first six months of the year.
Michael Geoghegan, the chief executive, said: "Some cooling off is possible, however I am confident that the authorities in leading economies like China can and will continue to deliver sustainable growth and support domestic demand."
The bank's balance sheet was healthy with its Tier 1 ratio – a key measure of its financial strength – rising to 11.5pc.
Profits in North America were $492m, compared with a loss of $3.7bn a year ago, as charges for bad loans fell to $4.6bn from $8.5bn. In Hong Kong and Asia Pacific profits rose 30pc to $5.86bn pre-tax, while in Europe it rose 18pc to $3.5bn.
The consumer banking arm returned to the black with profit of $1.17bn against a loss of $1.25bn last time.
The UK bonus tax cost the bank $325m.
Pay, bonuses and other benefits for the bank's 287,571 staff rose 6.5pc to $9.8bn.
HSBC revealed that it had set aside $2.52bn (£1.6bn) for its investment bankers in the first half, a $300m increase on last year despite a 1pc drop in net operating income to $10.3bn.
“Performance-related costs were $246m lower, as performance declined from the exceptional levels reported in the first half of 2009,” the bank said.
Higher salaries, though, more than offset the decline in bonuses.
HSBC is the first of six major banks to report results this week: Northern Rock posts figures on Tuesday; Lloyds Banking Group and Standard Chartered on Wednesday; Barclays on Thursday; and Royal Bank of Scotland on Friday.
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