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HSBC's net profit doubles to $6.8b on lower impairment

(Xinhua)
Updated: 2010-08-03 01:50
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HONG KONG - Global banking giant HSBC Holdings plc said Monday in Hong Kong that its net profit more than doubled in the first half of 2010 on a year-on-year basis, driven by significantly reduced loan impairment charges and strong emerging markets' profits.

The bank reported a $6.8 billion net profit for the period, up from $3.35 billion a year earlier.

Loan impairment charges and other credit risk provisions down $6.4 billion to $7.5 billion, the lowest since the start of the financial crisis, said the Group's Chief Executive Michael Geoghegan.

"This reflects the benefit of more stable economic conditions for many of our customers and follows our actions, begun before the crisis, to reduce exposure to unsecured lending outside our key relationships, to exit unprofitable business lines and to tighten underwriting standards for new business," he added.

Geoghegan also said the bank delivered a strongly improved performance in the first half of this year is in large thanks to the strategy of focusing on emerging markets.

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In the first half, the bank generated more than half of ifs pretax profit in Asia-Pacific, including Hong Kong, followed by Europe, with 32 percent of its profit.

In Asia, performance was ahead with pretax profits increasing by 20 percent to $5.6 billion. And the contribution of Asian profits generated outside Hong Kong grew to 50 percent.

Looking ahead, Geoghegan is confident about the growth potential of the bank, which has built increasingly more franchise in emerging markets and repositioned the business to deliver on this strategy.

"While the Western economies come to terms with austerity, we remain bullish on the outlook for emerging markets, " said Geoghegan, adding that leading economies like China is expected to continue delivering sustainable growth and supporting domestic demand.