HSBC Holdings Plc (HBC,HSBA.L) reported Monday an 11 percent rise in first-half profit before tax, while net profit declined as its European operations posted a loss and it had to provide more money for UK customer redress.
The Europe's biggest lender has recognized a provision of $700 million for certain US law enforcement and regulatory matters and a further $1.3 billion to compensate customers in the U.K.
Stuart Gulliver, chief executive of the company said, "We apologise for our past mistakes in relation to anti-money laundering controls, and it is a priority for senior management to build on steps already taken to manage risk and ensure compliance more effectively."
In the first half, the company's profit before tax increased to $12.74 billion, or 8.08 billion pounds, from $11.47 billion reported last year.
The company said its recent-period pre-tax profit included $4.3 billion gains from disposals and $2.2 billion of adverse movements in the fair value of own debt. Underlying pre-tax profit declined 3 percent to $10.61 billion.
Profit attributable to ordinary shareholders of the parent company was $8.15 billion, lower than $8.93 billion a year ago. Earnings per share dropped to $0.45 from $0.50 in the year-ago quarter.
In Europe, the company posted a loss before tax of $667 million. HSBC said economic conditions in Europe and other Western economies will continue to be subdued, but it continues to believe that emerging markets will grow at a reasonable pace.
Profit before tax in Hong Kong and Rest of Asia-Pacific rose $1.3 billion and accounted for about two thirds of the total profit before tax worldwide. In North America, the company grew its pre-tax profit by 26.3 percent.
Tax expense for the period increased to $3.63 billion from $1.71 billion a year ago.
Underlying revenues grew 4 percent, with particular increases in faster-growing regions of Hong Kong, Rest of Asia-Pacific and Latin America, the company said.
Net interest income declined to $19.38 billion from $20.24 billion in the same period last year. Net fee income was $8.31 billion, compared to $8.81 billion in the preceding year.
The Group's total assets at the end of June 2012 were $2.65 billion, up 4 percent since December 31, 2011.
As at June 30, 2012, Core tier 1 ratio was 11.3 percent, compared to 10.8 percent in the previous year. .
In addition, the directors have declared a second interim dividend for 2012 of $0.09 per share, taking the total dividends declared in respect of the first half of 2012 to $0.18 per share.
HSBA.L is currently trading at 536.2 pence, up 5.1 pence or 0.96 percent, on a volume of 16.48 million shares.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.