HSBC profits plunge 25pc in market turmoil

Aug 5 2008 LDP Business

BANKING giant HSBC said yesterday that the most difficult financial markets “for several decades” had knocked more than a quarter off profits in the first half of 2008.

The bank’s global bad debt charges jum- ped 58pc to $10.1bn (£5.1bn) – with impairments of $6.6bn (£3.4bn) and its troubled US consumer finance business largely to blame.

On top of this, HSBC wrote off a further $3.9bn (£2bn) on investments hit by the credit crunch, leaving its pre-tax profits 28pc lower at $10.25bn (£5.2bn).

Chairman Stephen Green said HSBC was “not immune from the turmoil”. He added: “The outlook for the near term remains highly challenging with significant uncertainty. Globally, consumer confidence is declining and . . . the US economy continues to be weak, driven by continuing housing market difficulties.

“The UK and other economies in Europe, which had enjoyed housing market booms, have also weakened.”

Despite the problems faced by the banking sector, HSBC stressed the strength of its balance sheet – in contrast with the fund- raising needed this year by rivals such as Barclays, Royal Bank of Scotland and Halifax Bank of Scotland.