HSBC profit drops 57% on rising bad-debt charges.
U.S. losses continue; investment banking arm sees earnings surge. LONDON (MarketWatch)
U.S. losses continue; investment banking arm sees earnings surge. LONDON (MarketWatch)
HSBC Holdings, Europe's largest bank, on Monday reported a 57% drop in net profit as surging losses from bad loans were partly offset by higher profits in its investment banking unit.
The group said net profit for the six months to June 30 fell to $3.35 billion from $7.72 billion.
Pretax profit dropped 51% to $5.02 billion, but excluding impacts from the fluctuating value of its own debt in both periods, pretax profit would have been roughly flat at $7.5 billion. Analysts polled by Reuters had expected a pretax profit of $4.9 billion.
Loan impairment charges to cover retail and commercial customers who can't pay back their debt jumped 39% to $13.93 billion, but was still lower than the $15.5 billion expected by analysts.
HSBC said financial markets may have passed, or be about to pass, the bottom of the cycle, but added the timing and scale of any recovery in the wider economy "remains highly uncertain."
CEO Michael Geoghegan said the group is concentrating on managing costs and risk, while taking the opportunity to grow in some target markets.
The bank's Tier 1 capital ratio improved to 10.1% from 8.3% at the end of December, mainly due to its share sale in April.
The investment banking arm, called global banking and markets unit, generated the lion's share of profit in the period, with pretax earnings jumping to $6.3 billion from $2.69 billion.
The division, which is focusing on emerging markets, benefited from significant market-share gains in trading and financing.
The personal-financial-services division, however, swung to a pretax loss of $1.25 billion from a profit of $2.31 billion a year earlier, driven by further losses in the U.S.
The group completed the closure of 813 branches in the U.S. during the period after deciding in March to halt consumer lending. It entered the U.S. market in 2003 with the acquisition of Household International -- a deal that Chairman Stephen Green has since said he wished had never happened.
The group said net profit for the six months to June 30 fell to $3.35 billion from $7.72 billion.
Pretax profit dropped 51% to $5.02 billion, but excluding impacts from the fluctuating value of its own debt in both periods, pretax profit would have been roughly flat at $7.5 billion. Analysts polled by Reuters had expected a pretax profit of $4.9 billion.
Loan impairment charges to cover retail and commercial customers who can't pay back their debt jumped 39% to $13.93 billion, but was still lower than the $15.5 billion expected by analysts.
HSBC said financial markets may have passed, or be about to pass, the bottom of the cycle, but added the timing and scale of any recovery in the wider economy "remains highly uncertain."
CEO Michael Geoghegan said the group is concentrating on managing costs and risk, while taking the opportunity to grow in some target markets.
The bank's Tier 1 capital ratio improved to 10.1% from 8.3% at the end of December, mainly due to its share sale in April.
The investment banking arm, called global banking and markets unit, generated the lion's share of profit in the period, with pretax earnings jumping to $6.3 billion from $2.69 billion.
The division, which is focusing on emerging markets, benefited from significant market-share gains in trading and financing.
The personal-financial-services division, however, swung to a pretax loss of $1.25 billion from a profit of $2.31 billion a year earlier, driven by further losses in the U.S.
The group completed the closure of 813 branches in the U.S. during the period after deciding in March to halt consumer lending. It entered the U.S. market in 2003 with the acquisition of Household International -- a deal that Chairman Stephen Green has since said he wished had never happened.
No hay comentarios:
Publicar un comentario