Back on track

2 August 2010 By Nicholas Paisner

The global bank’s H1 net income doubled to $6.8 bln, beating expectations. Its investment bank put in its second best performance ever. HSBC’s troubled U.S. business returned to loss and ROE is still below target. But the overall trend is positive.

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HSBC said on Aug. 2 that it made profit before tax of $11.1 billion in the first half of the year, an increase of 121 percent compared with the same period in 2009. Analysts surveyed by Thomson Reuters had expected pretax profit of $9.0 billion. HSBC's shares rose 5 percent by midday in London.

The bank said that loan impairment charges of $7.5 billion were the lowest since the start of the financial crisis. Impairments at HSBC's North American personal financial services division totalled $4.6 billion, down from $7.8 billion a year ago. HSBC's North American operations reported an underlying pretax loss of $80 million in the first half of the year, compared with a loss before tax of US$2.1 billion in the first half of 2009.

HSBC's investment bank reported first half revenue of $10.8 billion. The division made $12.3 billion in the first half of 2009 and $8.5 billion in the first half of 2007. The bank reported a Tier 1 capital ratio of 11.5 percent and an underlying return on equity of 9.3 percent.

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