HSBC gains 18% in second quarter

A girl holding a balloon walks past a bank branch of HSBC in St Helier, Jersey.Picture: Reuters

A girl holding a balloon walks past a bank branch of HSBC in St Helier, Jersey.Picture: Reuters

Published Aug 3, 2015

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London - HSBC Holdings, Europe’s largest bank, reported an 18 percent climb in second-quarter profit amid higher trading income and gains from a sale of shares in China’s Industrial Bank.

Pretax profit for the three months ended June 30 rose to $6.57 billion from $5.56 billion a year earlier, the London- based lender said in a statement on Monday.

The company also agreed to sell its Brazilian unit to Banco Bradesco for $5.2 billion.

CEO Stuart Gulliver, 56, has been seeking ways to shore up earnings, battered by rising misconduct costs.

In June, the bank unveiled a three-year plan to lower headcount by some 50 000, including through the sale of business units, to cut annual costs by up to $5 billion.

“Work is proceeding on all of our actions, in particular those aimed at reducing risk-weighted assets, cutting costs and turning around or disposing of underperforming parts of the business,” Gulliver said in the statement.

Since taking over in 2011, the CEO has announced more than 87 000 job cuts and exited about 78 businesses. The bank said Monday it had set aside $1.3 billion as of June 30 to cover allegations its traders manipulated key benchmarks in the foreign-exchange market.

HSBC’s Hong Kong shares ended the morning session unchanged at HK$69.70. The stock has fallen 5.8 percent this year, compared with a 3.3 percent advance by the benchmark Hang Seng Index.

While net interest income fell in the second quarter and fee income was little changed, HSBC’s revenue was buoyed by net trading income doubling to $2 billion. It said it booked a $1 billion gain from the sale of Industrial Bank shares.

BLOOMBERG

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