HSBC's H1 profit falls 29% to $8b; sees growth tapering in Asia
HSBC Holdings said emerging markets may grow more slowly this year and first-half profit fell 29% as bad loans rose in the US.
By Bloomberg |
LONDON: HSBC Holdings, Europe���s biggest bank by market value, said emerging markets may grow more slowly this year and first-half profit fell 29% as bad loans rose in the US. Net income for the six months ended June 30 fell to $7.7 billion, or 65 cents a share, from $10.9 billion, or 94 cents, a year earlier, the company said in a statement on Monday. HSBC fell 2.8% in London trading after the bank said the outlook is ���highly challenging with significant uncertainty.���
HSBC put $10.1 billion this year into loan-loss reserves, adding to charges of $17.2 billion in 2007 and $10.6 billion in 2006 for bad loans. While the London-based bank���s profit rose in Europe, Latin America and most of Asia, chairman Stephen Green said emerging markets will grow ���with less momentum��� than before.
���There���s some pretty negative news,��� said Alan Beaney, investment head at Principal Asset Management in Sevenoaks, England, which manages $2 billion including HSBC stock. ���Asia is slowing as was to be expected, and the US took a hit.���
HSBC was down 18.5 pence at 818.5 pence as of 11:40 am in London, valuing the bank at ��98.4 billion. The stock is down 2.8% this year, making it the best-performing bank in the 71-member Bloomberg Europe Banks & Financial Services index, which fell 32%.
HSBC���s first-half profit beat the $7.3 billion average estimate of 11 analysts surveyed. The bank reported a loss in the North American unit and declining profit in Hong Kong. Pre-tax profit rose in the rest of Asia, Latin America and Europe.
���We are monitoring the mortgage market carefully��� in the UK, chief executive officer Michael Geoghegan, 54, told analysts in London. Credit quality on loans didn���t deteriorate in the first half, he said. The bank increased first-half mortgage lending in the UK as other lenders pulled back, Geoghegan said.
���In Asia, compared with the buoyant conditions of last year, it is apparent that corporate activity in some sectors is slowing and demand for equity-related and wealth products has reduced as equity markets have declined,��� Green, 59, said in the statement.
HSBC���s profit in Hong Kong was hurt by ���significant falls��� in share prices, which reduced the value of the bank���s investments, it said in the half-year report.
Hang Seng Bank, the Hong Kong lender that is 62% owned by HSBC, said first-half profit rose 2%, beating the median estimate of five analysts surveyed.
Hang Seng increased lending and expanded in wealth management to overcome a cooling economy. The bank said Hong Kong and China will be ���affected��� by the slowing US economy and accelerating global inflation.
Pre-tax profit in China fell 41% to $907 million because year-earlier stake sales were not repeated, HSBC said. Profit rose 24% in India, 63% in the Middle East, helped by gains in United Arab Emirates.
The bank is in talks to cut the purchase price for a 51% stake in Korean Exchange Bank, two people familiar with the matter said. Asian stocks have fallen 18% since Lone Star Funds, led by managing partner John Grayken, agreed to sell the stake for $6 billion last September.
HSBC put $10.1 billion this year into loan-loss reserves, adding to charges of $17.2 billion in 2007 and $10.6 billion in 2006 for bad loans. While the London-based bank���s profit rose in Europe, Latin America and most of Asia, chairman Stephen Green said emerging markets will grow ���with less momentum��� than before.
���There���s some pretty negative news,��� said Alan Beaney, investment head at Principal Asset Management in Sevenoaks, England, which manages $2 billion including HSBC stock. ���Asia is slowing as was to be expected, and the US took a hit.���
HSBC was down 18.5 pence at 818.5 pence as of 11:40 am in London, valuing the bank at ��98.4 billion. The stock is down 2.8% this year, making it the best-performing bank in the 71-member Bloomberg Europe Banks & Financial Services index, which fell 32%.
HSBC���s first-half profit beat the $7.3 billion average estimate of 11 analysts surveyed. The bank reported a loss in the North American unit and declining profit in Hong Kong. Pre-tax profit rose in the rest of Asia, Latin America and Europe.
���We are monitoring the mortgage market carefully��� in the UK, chief executive officer Michael Geoghegan, 54, told analysts in London. Credit quality on loans didn���t deteriorate in the first half, he said. The bank increased first-half mortgage lending in the UK as other lenders pulled back, Geoghegan said.
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���In Asia, compared with the buoyant conditions of last year, it is apparent that corporate activity in some sectors is slowing and demand for equity-related and wealth products has reduced as equity markets have declined,��� Green, 59, said in the statement.
HSBC���s profit in Hong Kong was hurt by ���significant falls��� in share prices, which reduced the value of the bank���s investments, it said in the half-year report.
Hang Seng Bank, the Hong Kong lender that is 62% owned by HSBC, said first-half profit rose 2%, beating the median estimate of five analysts surveyed.
Hang Seng increased lending and expanded in wealth management to overcome a cooling economy. The bank said Hong Kong and China will be ���affected��� by the slowing US economy and accelerating global inflation.
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Pre-tax profit in China fell 41% to $907 million because year-earlier stake sales were not repeated, HSBC said. Profit rose 24% in India, 63% in the Middle East, helped by gains in United Arab Emirates.
The bank is in talks to cut the purchase price for a 51% stake in Korean Exchange Bank, two people familiar with the matter said. Asian stocks have fallen 18% since Lone Star Funds, led by managing partner John Grayken, agreed to sell the stake for $6 billion last September.
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