HSBC profit rises 10 percent, bank selling Brazil unit

The lender was boosted by huge profits in Hong Kong.

HSBC Holdings Plc said first-half profit at its investment bank dropped 5.6 percent as legal expenses overshadowed an increase in revenue from foreign exchange and equities.

Asia provided 69 percent of the bank’s reported profit, or $9.4 billion.

“All I can tell you is that we’re very interested, the offer we made was a very good one”, Zabalza said, as quoted by Reuters.

HSBC confirmed the Brazil sale in a separate statement to the Hong Kong bourse. Yesterday Zabalza declined to comment on whether Bradesco was in exclusive negotiations with HSBC.

The lender is now considering whether to move its headquarters from London to the Asian hub.

HSBC was forced in February to apologise for “unacceptable” failings at its Swiss division following allegations that the unit helped rich clients hide billions from the taxman.

Profit before tax climbed to $13.628 billion from $12.340 billion reported previous year.

“There are many factors that may affect the range of outcomes, and the resulting financial impact, of these matters”, HSBC said in reference to the $1.3bn provision.

HSBC’s Hong Kong-listed shares rose 1.4% following the result.

Various regulators and law enforcement authorities around the world, including in the US, the EU, Brazil, South Korea and elsewhere, continue to conduct investigations concerning the role of banks, including HSBC, in foreign exchange-rigging.

The Financial Times report quoted sources familiar with the matter as saying that HSBC is nearing the sale of its Brazilian subsidiary to local rival Bradesco for close to USD4bn.

“The return to shareholders was pretty decent”.

But Europe’s largest lender hastened to add that pre-tax earnings rose by 10 percent over the first six months of the year. The bank plans to conclude this review by the end of this year.

“A lot of things could happen”.

“We think there is an opportunity to create another Hong Kong in Guangdong”, it said.