HSBC first-half profits fall 51pc as bad debts soar

HSBC first-half profits fall 51pc as bad debts soar
HSBC said profits had more than halved in the first six months of the year, after bad-debt charges soared.

By Telegraph Staff
Published: 10:07AM BST 03 Aug 2009

HSBC Hldgs
The 51pc drop in pre-tax profits to $5bn (£2.98bn) came after its bad debt charges soared 39pc to $13.9bn, the bank reported on Monday.

Rival Barclays said earlier this morning its profits climbed 8pc to £2.98bn for the same period.


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HSBC raised $17.8bn in a rights issue in April to shore up its capital position, and it had a Tier 1 ratio of 10.1pc at the end of the first half. The bank has had to make some $67bn of bad loan provisions in the last three and a half years, in part because of its purchase of US subprime lender Household International in 2003.

“It may be that we have passed, or are about to pass the bottom of the cycle in the financial markets,” HSBC chairman Stephen Green said in the statement. “Operating conditions in the financial sector have continued to improve as the effects of government and central bank policies work through the system.”

In its global banking and markets business, profit before tax more than doubled to $6.3bn on an increase in currency trading and underwriting bond sales.

The shares were up 3.1pc to 624.6p in morning trading.

http://www.telegraph.co.uk/finance/newsbysector/banksandfinance/5964507/HSBC-first-half-profits-fall-51pc-as-bad-debts-soar.html