Global banking giant HSBC Holdings yesterday reported a rise of 4 percent in first-half net profit as earnings from new acquisitions and its conservative strategy offset reducing corporate demand for financial services.
The group posted a net profit of US$3.67 billion, against US$3.53 billion in the six months to June last year.
Pre-tax profit also rose four per cent to US$5.44 billion from US$5.21 billion a year earlier.
Interim net profits of its local presence in Hong Kong, Hongkong and Shanghai Banking Corp Ltd, and Hang Seng Bank Ltd, rose 8.8 percent and 3.5 percent, respectively, defying analysts' expectations of negative growth.
HSBC Holdings' Chairman John Bond said demand for financial services this year has declined due to a slower growth in most of the world's economies, a falling equity market as well as slowed corporate activities.
Under such circumstance, instead of increasing risk to lift up revenue, the group positioned its business more conservatively and maintained strong liquidity. Only 44 percent of HSBC's total assets were in loans by the end of June.
In addition, "low interest rates, low inflation and resilient consumer spending in the developed markets have offset the effects of lower levels of corporate investment and weaker profitability", Bond said.
(China Daily HK Edtion 08/07/2001)
