HSBC in first half pretax profit boost
HONG KONG (AP) HSBC Corp. says strong performance in Asia helped to boost first-half profit to 10 percent, and the bank has announced the sale of its Brazil business.
Europe’s biggest bank said pre-tax profits in the first six months were $13.6 billion (£8.7bn) – up from $12.3 billion a year earlier.
Regarding the potential relocation of its global headquarters from London to Hong Kong, the bank said its board would make a decision by the end of this year.
HSBC’s local operations were the country’s sixth largest, as measured by assets, but it was less than a third the size of the fifth largest, Santander’s Brazil unit.
The future of HSBC as a UK-based bank will come into renewed focus when the lender reports half-year results this week while Standard Life and More Than owner RSA are among a clutch of major insurers publishing latest figures.
HSBC’s Hong Kong shares ended the morning session unchanged at HK$69.70.
The cost-cutting strategies, aimed at saving US$4.5 billion to US$5 billion per year by 2017, were proving to have initial effects, especially in troubled businesses such as investment banking.
HSBC also announced the sale of its Brazilian unit to Banco Bradesco for $5.2 billion (£3.3 billion) and outlined plans to exit Turkey. HSBC said yesterday that regulators and law enforcement agencies, including those in Brazil, the European Union, South Korea and the US, are continuing to investigate rigging in the market.
HSBC chief executive officer Stuart Gulliver said that the lender anticipates a modest improvement in the world’s economy in the second half and added that ” more accommodating monetary conditions” should help China’s economy to stabilise after first-half challenges. In February, HSBC was accused of helping hundreds of customers to avoid paying UK tax by using its Swiss business. Its newly-ringfenced British retail bank will be shifting its headquarters to Birmingham by 2019 and is expected to be renamed Midland Bank, after the brand HSBC acquired in 1992.
The price was worked on the basis of HSBC Brazil’s shareholder equity of 11.6 billion reais at the end of previous year.
Net profit in the period more than doubled from a year ago to 646 million compared to 300 million and diluted earnings per share gained to 0.55 from 0.26.
The bank has already announced plans to slash operating costs, including cutting 50,000 from its 260,000-strong workforce worldwide.
The results also revealed a provision of just over $1.1bn as regulatory settlements continue to haunt the bank, a Sky News City Editor Mark Kleinman reported earlier.