Lower costs, and a 35 per cent cut in the loan impairment charge to $3.1bn (£2bn), meant solid half-year earnings growth for HSBC (HSBA). But that still fell short of analysts' expectations and the shares dipped 5 per cent on the day the figures appeared.
A less buoyant emerging markets outlook didn't help sentiment, either. Chief executive Stuart Gulliver pointed to weaker Chinese growth prospects as authorities there focus on "quality rather than the quantity of growth". That said, HSBC's Hong Kong business still boosted profits 12 per cent to $4.2bn, while the remaining Asia-Pacific business increased profits 16 per cent to $5.1bn. But HSBC's Latin American operation suffered a 25 per cent bad debt charge hike, which resulted in profits there falling to $466m from last year's $1.15bn.
In Europe, operating costs fell 15 per cent, despite $412m of UK customer redress charges - and, combined with lower impairment charges, last year's $667m loss here was turned into a $2.8bn profit. Meanwhile, in North America, the credit quality nightmare generated by the former Household International subprime unit appears over - bad debt charges there dropped 68 per cent to $696m.
Broker Investec Securities expects full-year EPS of 101¢ (74.2¢ in 2012) and net tangible assets (NTA) of 793¢.
HSBC (HSBA) | ||||
|---|---|---|---|---|
| ORD PRICE: | 725.8p | MARKET VALUE: | £135bn | |
| TOUCH: | 725.7-725.8p | 12-MONTH HIGH: | 773p | LOW: 538p |
| DIVIDEND YIELD: | 4.2% | PE RATIO: | 13 | |
| NET ASSET VALUE: | 934¢ | |||
| Half-year to 30 Jun | Pre-tax profit ($bn) | Earnings per share (¢) | Dividend per share (¢) |
|---|---|---|---|
| 2012 | 12.7 | 45.0 | 18.0 |
| 2013 | 14.1 | 54.0 | 20.0 |
| % change | +11 | +20 | +11 |
Ex-div: 21 Aug Payment: 9 Oct £1=$1.53 | |||
