HSBC increases half-yearly profits by 11% to £8.1b

HSBC has announced a big increase in profits for the six months to 30th June 2012.

Pre-tax profits were up 11 per cent to £8.1 billion helped in part by the sale of assets in the US and growth in its investment banking business in Asia.

Lowering the profit figure were provisions of $1.3 billion set aside to cover the mis-selling of financial products and a further $700 million to cover fines linked to money laundering in the US.

Profits were aided by the sale of its Card and Retail Services business and 138 bank branches in the US. HSBC, the world’s biggest bank, has been attempting to streamline its operations. This has led to a reduction in staff from 299,000 worldwide to 271,500 in the last 12 months.

HSBC said it expects growth to continue in the emerging markets but that it expected economic conditions in Europe and Western economies are likely to remain “subdued.”

Earlier this month a report by the US Senate found that lax security controls and the inability of its compliance division to function effectively at the bank allowed Mexican drug cartels to launder money through the bank between 2002 and 2009.

Douglas Flint, HSBC Group Chairman, said: “HSBC delivered a successful financial performance in the first half of. However, regulatory and compliance events in the first six months of the year overshadowed financial performance. And that has added further to public concern and distrust of the banking industry.

“HSBC has made mistakes in the past, and for them I am very sorry. Candidly, in particular areas we fell short of the standards that I, my colleagues, our regulators, customers, and investors expect.  We cannot undo the mistakes but I can assure you that Stuart Gulliver and I are determined, and have made it our most important priority, to strengthen HSBC and reinforce our values,” added Mr Flint.

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