Investment bank weakness hits HSBC

That was partly down to a further $234m provision to cover customer redress costs in the UK (essentially, PPI-related compensation). Of more significance, however, was a lacklustre performance at the lender's global banking and markets division (investment banking). Revenue there fell 9 per cent, primarily driven by a slide in foreign exchange-related activity amid continued low levels of volatility. That's hardly ideal given that the division generated 41 per cent of profit in the half, leaving it as the lender's largest profit centre.

The bank's net interest margin (the difference between what it charges borrowers and its funding costs) fell 22 basis points to 1.95 per cent, too. This, explains banking analyst Ian Gordon of broker Investec, is due to the impact of "extended near-zero interest rates" as well as a shift in business mix from disposals.

Still, improving credit quality did cut HSBC's impairment charge by 41 per cent to $1.8bn. That's not bad given that, just two years ago - and as the lender struggled with a bad debt crisis at its US consumer arm (now in run-down) - the charge was nearer $5bn. HSBC found a further $0.5bn of savings in the half, too, leaving it on track to deliver its planned $2bn-$3bn of savings between 2014 and 2016.

Add cost savings to restructuring efforts since 2011 - which have seen more than 60 non-core operations sold or closed - and the capital cushion received a further boost. In fact, HSBC's Basel III common equity tier one capital ratio rose 0.4 percentage points in the half to an impressively healthy 11.3 per cent.

Broker Investec Securities expects full-year EPS of 83.7¢, tangible net assets of 798¢ a share and a 51¢ dividend (from 84.3¢, 768¢ and 49¢, respectively, in 2013).