HSBC saw first-half profits cut in half in the first six months of the year, as impairments reached $13.9bn (£8.2bn), but signalled that the economic crisis was beginning to ease.
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.
Global banking and markets (GBM), the group’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.
Chairman Stephen Green offered a cautiously positive outlook for lenders, saying: “It may be that we have passed, or are about to pass, the bottom of the cycle in the financial markets.”
But the bank’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.
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.
HSBC’s personal banking arm posted a $1.2bn loss, compared to a $2.3bn profit last year.
The bank made £6.7bn in new mortgage loans in the UK, increasing its market share from 4.5 per cent to 9.5 per cent.