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August 4, 2008

HSBC first-half profit down 28%

by Gill Montia

Story link: HSBC first-half profit down 28%

HSBC, the UK’s largest bank, has reported a 28% fall in first-half pre-tax profit.

The group posted pre-tax profit of £5.2 billion in the six months to the end June, having written down £5.3 billion in total on investments and its US consumer finance unit.

Mortgage-backed investments cost the bank £2 billion, while the US business wrote down £1.1 billion.

The bank says it has set aside another $10.1 billion to cover bad debts but describes its balance sheet as strong compared to its High Street competitors, such as Royal Bank of Scotland and Barclays.

This is due in part to the fact that HSBC has focused growth on its emerging markets businesses, all of which remained profitable during the first-half of the year.

In the UK, the February launch of the lender’s Ratematcher deal (which allowed remortgagers to match their fixed-rates as low as 4.6%) helped to double the group’s share of the new mortgage market from 3% to 6%.

Meanwhile, its UK commercial business saw a 23% rise in pre-tax profit and reported that arrears rates have remained broadly unchanged despite a 13% rise in lending.

 

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Related stories to: HSBC first-half profit down 28%

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