HSBC has posted a pre-tax profit rise of 10 per cent to £8.7bn for the first half of 2015, compared with £7.9bn for the same period last year.
In a results update that tackles conduct issues, HSBC’s global presence and its plans to ring-fence retail and investment operations, the underlying figures show that revenues are up, profits are up and losses on non-performing loans in the UK and Europe are falling.
Stuart Gulliver, group chief executive, said: “Our performance in the first half of 2015 demonstrated the underlying strength of our business.
“Our diversified, universal model enabled the group to deliver increased profitability in spite of slow global growth.”
The statement shows that HSBC’s impairment charge from non-performing consumer and corporate loans, across its European operations, was £206m for the first half of 2015.
This represented a big drop from a £385m impairment loss in the same division six months earlier.
Across Europe, the £206m total was made up, in part, by £72m of losses in personal loans and £20m in residential mortgages.
But interestingly, the bank has a separate figure for how many of its “renegotiated loans” are impaired.
For example, the bank has £517m of impaired “renegotiated” mortgages in the UK and Europe, along with £62m of impaired, “renegotiated” personal loans in the same divisions.
At June 30, the group had made allowances of £2.1bn across its personal loans in Europe, in case those loans aren’t repaid.
As for general, group-wide strategy details, HSBC said the business design of its ring-fenced bank was settled and Birmingham will be its headquarters. A new headquarters is being constructed to be ready by 2018.
Around 22,000 UK employees of the UK bank will migrate to this new employer by the end of 2015.
HSBC said that in the first half of 2015, its measures to help UK customers manage their financial affairs better delivered improved outcomes for customers and “reduced a source of recurring frustration”.
As a result, overdraft fees in the UK fell by some £57m, reflecting lower pricing and fewer instances of unauthorised overdrawn accounts, prompted by a new policy of text messaging when customers approached their agreed limits.
Elsewhere in the group, a provision of £835m has been made for litigation and conduct relating to various probes into Libor, Forex and other issues.
By Marcel LeGouais