UPDATE: HSBC 1H Net Profit Doubles To $6.76B On Lower Charges

2nd Aug 2010 10:05

(Adds detail and CEO comment.) By Patricia Kowsmann and Margot Patrick Of DOW JONES NEWSWIRES LONDON (Dow Jones)--HSBC Holdings PLC (HBC) said Monday that its net profit for the first half of the year doubled on lower impairment charges and a gain on the value its own debt. The U.K.-based but Asia-focused bank, however, posted a fall in investment banking profit, as market conditions deteriorated in the second quarter. Chief Financial Officer Douglas Flint told a conference call that the outlook for the second half is good, including in investment banking, but that the half is typically slower because the summer months and winter holidays mean lower volumes. HSBC reported a $6.76 billion net profit for the first half of the year, up from $3.35 billion a year earlier. Pretax profit came in at $11.1 billion, up from $5.02 billion, beating analysts' expectations of $9.3 billion. Results included a $1.13 billion gain for the fair value of the bank's own debt, compared with a $2.3 billion charge a year earlier. Banks can record gains if the value of their debt falls, since it becomes theoretically cheaper to repurchase it, and conversely book losses if the value of the debt rises. Impairment charges fell to $7.52 billion from $13.93 billion, the bank said. "At HSBC, we have a clear and distinctive strategy. That we delivered such a strong and improved performance in the first half of 2010 is in large part thanks to this strategy and our success in repositioning and transforming the business to deliver on it," Chief Executive Officer Michael Geoghegan said in a statement. Although the bank was profitable in all customer groups, its investment banking business posted a 13% fall in pretax profit for the period to $5.63 billion. Profit from private banking also fell to $556 million from $632 million. At 0854 GMT, HSBC shares were up 23 pence, or 3.5%, to 668 pence. They had been up about 2.7% shortly before the earnings were announced at 0815 GMT. HSBC declared a second interim dividend of 8 U.S. cents a share, bringing it to 16 cents a share total for the first half. -By Patricia Kowsmann and Margot Patrick, Dow Jones Newswires. Tel +44(0)207-842-9295, [email protected] Order free Annual Report for HSBC Holdings plc Visit http://djnweurope.ar.wilink.com/?ticker=GB0005405286 or call +44 (0)208 391 6028 (END) Dow Jones Newswires August 02, 2010 05:05 ET (09:05 GMT)