HSBC net profit up 4 percent for 1H

By staff and wire reports

HONG KONG -- Bank HSBC Holdings PLC on Monday said net profit rose 4.1 percent for the first half of 2001.

HSBC made a net profit of $3.67 billion, up from $3.53 billion the same period last year.

That was better than expected. Analysts anticipated a 5 percent dip in net profit, to $3.35 billion.

But the bank said the global economic environment remained challenging. On a diluted basis, HSBC earned 39 cent per share, down from 41 cents the same time last year.

"Prospects for the Asian markets in the second half of the year remain uncertain, with question marks over the outlook for the world economy," Chairman David Eldon said.

Pretax profits up more sharply

HSBC's pretax profit rose 8.6 percent for the first half, to $5.84 billion. After goodwill amortization, pretax profit was up 4.3 percent to $5.43 billion, from $5.2 billion.

The bank, with operations across Europe, Asia, Latin America and North America, said the economic slowdown had not yet had a significant impact on bad debts.

In Asia, Korea, India and Taiwan saw sustained growth in personal lending, the bank said. But Singapore saw a drop in lending, mainly on the corporate side.

Charge for bad debts up $73 million

HSBC's bad debt charge for the six months to June 30 was $441 million, up $73 million from a year ago. The rise was less than expected.

The bank proposed an interim dividend of $0.19 per share, a 27-percent increase over the 2000 period.

HSBC's shares have underperformed the UK banking sector by about 15 percent so far this year and European peers by around eight percent.

In London, the shares were up 2.2 percent at 835 pence at 0817 GMT.

In Hong Kong, HSBC shares closed down 0.28 percent or 25 cents to HK$90.50.

In March, HSBC moved its back office operations to Guangzhou, China, from Hong Kong to cut costs.

Reuters contributed to this report.