HSBC profit up 121%

HSBC Holdings brought cheer to global markets reporting its second best-ever half yearly results, with profits before tax jumping 121% to $11.1 billion compared to the first half of 2009. Bad loans, or loan impairment charges, dropped by 46% to $7.5 billion, signalling that the worst of the banking crisis may be over for HSBC.

HSBC made profits in every market except North America, including $340 million in India, up from $201 million last half year. HSBC?s profits from Mainland China were $1,281 million, and from Hong Kong $2877 million.

In India, despite making a loss of $50 million in personal financial services, HSBC?s top brass remains bullish about prospects. ?I expect India could deliver higher growth in the medium term than China,? said Michael Geoghegan, group chief executive officer, who recently relocated to Hong Kong. HSBC has just acquired RBS? retail operations in India, and expects to complete the deal by mid-2011, and Mr Geoghegan said that will give the bank access to 1.1 million more customers. India is HSBC?s second-highest contributor from Asia, following Hong Kong and mainland China, but ahead of Singapore, Australia and others.

HSBC?s losses in the personal finance segment were due to bad credit card loans and consumer finance. David Flint, chief financial officer, told ET: ?We had overstretched on HSBC credit cards and consumer loans given the constraint on branches.?

Overall, Asia contributed 52.8 % of HSBC?s global profits before tax ? and the rest of Asia Pacific, led by China and then India contributed 26.9%. Hong Kong itself accounts for about 25.9 % of HSBC?s profits.

HSBC, which is hoping to finish a listing in Shanghai sometime in 2011, said that the bank currently has no plans to consider a listing in India like rival Standard Chartered and will focus on the Shanghai listing.