HSBC Holdings Plc (HBC, HSBA.L) reported Monday a higher profit for its first half, with strong growth in all regions along with sharp decline in loan impairment and other credit risk provisions. The bank also said it plans to cut 30,000 jobs by the end of 2013 as part of a broader cost-cutting drive. The shares are currently trading higher on LSE.
Profit attributable to shareholders of the parent climbed 35 percent to $9.22 billion from $6.76 billion a year ago. Earnings per ordinary share grew to $0.50 from $0.38 last year.
First-half pre-tax profit of $11.47 billion was 3.3 percent higher than prior year's $11.10 billion.
Net assets per share increased 17 percent to $8.59 from $7.35 in the previous year.
Profit growth in commercial banking and Retail Banking and Wealth Management divisions were partly offset by lower result in Global Banking and Markets.
Revenues, i.e., net operating income before loan impairment charges and other credit risk provisions, edged up 0.4 percent to $35.69 billion from $35.55 billion a year ago. For the period, loan impairment and other credit risk provisions fell 30 percent year-over-year to $5.3 billion.
The company recorded double-digit revenue growth in Hong Kong, Rest of Asia-Pacific and Latin America, while revenue declined in the U.S. as expected, as the company continued to manage down balances in the run-off portfolios.
Half-yearly net interest income totaled $20.235 billion, 2.4 percent higher than $19.76 billion last year.
The core tier 1 ratio remained strong at 10.8 percent, higher than 9.9 percent as of June 30, 2010.
Further, the Directors declared a second interim dividend of $0.09 per ordinary share. Total dividends for the year would be $0.18 per share, up 12.5 percent from last year.
Looking ahead, the company said it remains positive on the outlook for emerging markets, while growth in the US and Europe is likely to remain sluggish as long as the impact of high debt levels and government budget cuts weigh on economic activity.
In addition, HSBC said it would cut a further 25,000 jobs between now and 2013 as part of a broader cost-cutting drive. The firm targets $2.5 billion - $3.5 billion of sustainable cost savings by 2013. Since the start of 2011, the company has begun operational restructurings in Latin America, the US, the UK, France and the Middle East which would reduce headcount by around 5,000.
HBC is currently trading at $51.33 in pre-market activity, up $2.46 or 5.03 percent.
HSBA.L is currently trading at 623.10 pence, up 28.60 pence or 4.81 percent.
For comments and feedback: editorial@rttnews.com