HSBC sees pre-tax profits drop by half

In April HSBC Holdings raised $17.8 billion through a fully underwritten rights issue.
Banking group HSBC has seen its pre-tax profits slump by 51 percent for the first six months of 2009, tumbling to $5 billion compared to $10.2 billion for the same period a year ago.

Meanwhile, total operating income for the half-year fell six percent to $40.2 billion, from $42.9 billion a year ago. Group Chairman Stephen Green said in a statement that while “it may be that we have passed, or are about to pass, the bottom of the cycle in the financial markets” any recovery in the wider economy was highly uncertain. “Our view continues to be cautious as long as a number of serious impediments to growth remain,” Green added. Earnings per ordinary share were 63 per cent lower at $0.21, compared to $0.57 for the same period last year. Green added that the group had delivered on what it hoped to achieve, and that results and profitability overall had been ahead of expectations at the start of the year.

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“We have continued to position HSBC’s balance sheet conservatively,” he said, “while focusing on enhancing the capabilities which will enable us to deliver sustainable long-term growth once the current global downturn has ended.” In March HSBC announced a 62 percent slide in annual pre-tax profits to $9.3 billion. The group suffered $15.5 billion losses in its U.S. businesses, forcing it to scale back its operations in the U.S. and close its Beneficial and HFC brands with the loss of 6,100 jobs. In April of this year, HSBC Holdings raised $17.8 billion through a fully underwritten rights issue. HSBC serves more than 100 million customers and businesses, through 8,500 offices located in 86 countries and territories.