HSBC reports 121% profit hike
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HSBC Holdings has revealed a profit hike of $11.1bn (£7.05bn) in the first half of 2010, up from $5bn (£3.1bn) in the first half of 2009.
In its H1 2010 results, the UK bank revealed profits after writedowns were also up 34 per cent, from $7.5bn in H1 2009 to $10bn this year.
HSBC’s UK business grew by almost a third from £1.05bn in H1 2009 to £1.32bn in H1 2010. The total UK mortgage book remained broadly static over 12 months at £61bn but overall lending reduced from £217bn to £196bn. HSBC, a direct-only lender, says it lent 8 per cent of all new mortgages over the 12 month period.
The bank’s UK business also suffered a one-off £195m tax as a result of 2009 employee bonuses
Its European retail business grew by 6 per cent over 12 months by $206m (£130.9m).
Its core tier 1 ratio rose from 8.8 per cent last year to 9.9 per cent in H1 2010. The bank recently passed the EU bank stress test.
In an interview with Cantos, HSBC group chief executive Michael Geoghegan said much of the strength of the results came from improving personal financial services business in Asia, which he says will be at the “forefront” of the bank’s plans going forward. He said: “Asia will spend $150bn more on retail products this year. The West will spend $100bn less. So Asia does have to be the powerhouse.And we’re getting a good share of that business. And I think there’s good things to come yet.”
This morning, Chancellor George Osborne warned UK banks that the Government would not tolerate them holding credit from UK small business, but Geoghegan said his bank was lending more to UK business.
He said: “New lending to small businesses is up about 35 per cent. That is a reflection itself of what we believe. And obviously, because our customers are more conservative - they keep more deposits with us - so I’m not saying that personal finance is as profitable as it could be, but it will be more profitable as those customers have more confidence in the economy and they start investing in other assets or in wealth products.”
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Readers' comments (1)
Ken Simpson | 2 Aug 2010 9:32 pm
HSBC have stuck at what they are good at - BANKING but have lost favour with many through the sale of 'non core' sections of the business to Mercer's and JLT.
Small businesses and HSBC? Not sure the Operation Osborne will fall on open ears. Probable tuning in to Greensleeves as he awaits an answer to his call.
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