Thu, 23 Mar 2023 Today's Paper

HSBC first-half profits up 10% on China investing frenzy

4 August 2015 05:18 am - 0     - {{hitsCtrl.values.hits}}


REUTERS: HSBC Holdings said its first-half profit climbed a better than expected 10 percent, driven by a strong performance in Hong Kong that comes as the bank considers moving its headquarters to the Asian financial hub.

HSBC also announced yesterday the sale of its Brazil unit to Banco Bradesco SA, the country’s second-biggest private-sector bank, for a higher than expected 17.6 billion reais ($5.2 billion), as HSBC seeks to cut underperforming businesses.

Europe’s biggest bank reported that pretax profits in the six months to the end of June were $13.6 billion, up from $12.3 billion a year earlier and well above analysts’ average forecast of $12.5 billion according to a poll conducted by the bank.

HSBC has become increasingly reliant on its former headquarters of Hong Kong for profits as its businesses in Europe, the United States and other emerging markets slow.

The bank’s improved profits were driven by an investing frenzy in Hong Kong among individual customers amid China’s soaring markets earlier in the year, the bank said.

“HSBC’s wealth management revenues in Hong Kong from equities, mutual funds and asset management increased significantly,” Chairman Douglas Flint said in the earnings statement.

China’s stock markets have been a boon for the lender, driving profits for the bank’s broking business in Hong Kong via the Stock Connect trading link with Shanghai as mainland shares soared prior to their June crash.

The market turmoil in recent weeks could mean a gloomier outlook for the second half for the bank, however, if investors’ souring on Chinese stocks curbs their buying of shares and related investment products.

“The bank’s profits benefited from the boost from Stock Connect before the market turned, so I wouldn’t extrapolate the same level of performance into the third quarter and beyond,” said Ian Gordon, analyst at Investec Securities in London.

Asia now accounts for two-thirds of HSBC’s profits, and Chief Executive Stuart Gulliver has pinned the lender’s fortunes on a ‘pivot’ to the region and its fast-growing economies.

The bank is speeding up a cull of unprofitable units and countries by cutting almost 50,000 jobs - half of them from selling businesses in Brazil and Turkey.
HSBC also said it had increased to $1.3 billion from $550 million the sum set aside to cover costs from various regulatory probes into banks’ rigging of foreign exchange markets worldwide.

The lender’s shares were unchanged in Hong Kong early afternoon yesterday, against a 1 percent drop in the city’s benchmark Hang Seng index. 

  Comments - 0

Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment

Wokeism: Is it destructive, or are you afraid of change? A response

In order to critically discuss a movement, we must first understand its etymo

Defeat in Ananthapuram Battle denoted the LTTE’s end

Many battles were fought during the long war between the Sri Lankan armed for

Wokeism: A Weapon of Mass Destruction?

When can one say they’ve had enough of being in a state of ‘wokeness’ a

Fake news fraud using Prabha and family

Members of a dozen Sri Lankan Tamil families gathered in the evening at the r