HSBC achieves rise in half-year profit

5th Aug 2013 09:02

HSBC Holdings reported a 10 per cent rise in half-year profits to 14.1bn dollars as it kept a tight rein on costs.However earnings fell short of the $14.6bn expected by the average of 14 analysts polled by the company due to a fall in revenue.Europe's biggest bank posted revenue of $34.4bn, down 7.0% from the prior year, reflecting subdued economic growth in western countries and a slowdown in China."In spite of slower short-term macroeconomic growth, the long-term economic trends which informed our strategy remain intact," Chief Executive Officer, Stuart Gulliver, said."The global economy will continue to rebalance towards the faster-growing markets and trade and capital flows will continue to expand."The company's profits gained from its cost cutting programme, delivering a further $0.8bn of savings. In April, HSBC sold a $3.7bn non-real estate personal loan portfolio, which accelerated the run-off of the Consumer and Mortgage Lending portfolio in the US. The group announced a further 11 disposals or closures of non-strategic businesses, bringing the total number of transactions announced since the beginning of 2011 to 54. However, the rate of such transactions will slow as the first phase of strategic delivery draws to a close.Gulliver said the steps taken to reshape HSBC have released around $80bn in risk-weighted assets to date, with a further potential release of $15bn. "Together with internal capital generation, this will further support investment in organic growth opportunities that fit with our strategy," he added. The group's capital position strengthened and the core tier 1 ratio improved to 12.7% compared with 12.3% at the beginning of the year and 11.3% a year ago.HSBC recommend a dividend of $0.28 per ordinary share, up from last year's $0.23.Shares slid 3.62% to 727.40p at 09:59 on Monday.RD