Bullish HSBC shrugs off rise in bad debts

HSBC saw first-half profits cut in half in the first six months of the year, as impairments reached $13.9bn (&pound;8.2bn), but signalled that the economic crisis was beginning to ease.<br /><br />Pre-tax profit fell to $5bn, a 51 per cent decline on the $10.25bn earned in the same period of last year, but a marked turnaround from the $940m loss seen in the second half of 2008.<br /><br />Global banking and markets (GBM), the group&rsquo;s investment banking division, reported a record pre-tax profit for the period of $6.3bn, more than double the $2.7bn in the first half of 2008.<br /><br />Chairman Stephen Green offered a cautiously positive outlook for lenders, saying: &ldquo;It may be that we have passed, or are about to pass, the bottom of the cycle in the financial markets.&rdquo;<br /><br />But the bank&rsquo;s US consumer finance unit Household, which is in the process of being wound down, sank to a $2.9bn pre-tax loss as loan impairments increased less than expected, from $6.69bn to $7.3bn.<br /><br />Chief executive Michael Geoghegan said the bank had reduced its US run-off portfolio by nine per cent during the six months, from $100.4bn to $91.2bn, adding that the process was going well.<br /><br />HSBC&rsquo;s personal banking&nbsp; arm posted a $1.2bn loss, compared to a&nbsp; $2.3bn profit last year.<br /><br />The bank made &pound;6.7bn in new mortgage loans in the UK, increasing its market share from 4.5 per cent to 9.5 per cent.