HSBC says first half profit up five per cent

Global bank HSBC highlighted its focus on emerging markets yesterday as it reported a five per cent rise in first-half profits and reiterated that the UK was its most difficult credit market.

Pretax profit for the six months ended June 30 rose to $10.6 billion from $10.12 billion in the same period last year, the world's second-largest bank by market value said in a statement.

The average estimate in a Reuters poll of 10 analysts was for a 2.5 per cent fall to $9.87 billion, with a range of between $9.34 billion and $10.52 billion. However analysts' forecasts had been complicated by the introduction of new IFRS accounting rules and three estimates had predicted a profit rise.

HSBC said income from net lending rose 10 per cent to $16.69 billion, while provisions for bad debts were $537 million higher. credit market amid a cooling housing sector and slower employment growth.

Chairman John Bond said the first half figures highlighted HSBC's success in expanding consumer finance in emerging markets. Mr Bond also said the focus on retail and commercial banking would be more important, amid fewer opportunities to generate profits from treasury activities in the current interest rate environment.

HSBC is the second largest UK bank to update investors on trading but, unlike Lloyds TSB whose shares dipped last week on higher retail bad debts, HSBC is less exposed to fallout from the country's £1 trillion consumer spending spree.

HSBC, which has operations in 77 countries, is more than a year into a five-year plan to boost growth and is targeting emerging middle classes and growing companies in countries such Brazil, Mexico, South Korea and China.