The Banking and Strategy Initiative

Chillin' out till it needs to be funded

Bank Results Season: HSBC climbs on $8.44B H1 Net Profit (Q2 2012)

HSBC rostered an amazing $19B in Net Interest income in the first 6 months and aboard the Q1 ship that posted $6.8B in reported PBT, grew PAT above expectations to $8.44 B though down from last year’s $9.22 B in the period and nowahere near targets of sustable Wealth Management Income and Additional CMB and Global Banking and Markets income where it sas adding only $1.5 B against combined targets of $6.5B to $7 B for the bank

PBT was up for the first half to $12.7B, growing in double digits from H1 2011. Provisions for UK penalties were $1.3B and that for US penalties were $0.7B CMB and Global BAnking and Trading Revenues ghave grown 16% after integration. Trading Income was $4.5 B in addition to the NII of $19.2 B

RoE has ticked down to 10.5% but thats not necessarily a bad thing as CAR is up by 10% from 10.1% to 11.3% and Roe has come down from 12.22% but still in double digits Another dividend of 9 cents a share was announced

Hongkong, Rest of AP and Latin America had led with double digit growth in revenues in Q1 at 16% + in Asia. Sequential PBT for the six months is up 23% on the back of a bad H2 held up by DVA and brought down by pain in Europe

Bank’s sustainable cost sacvings will likely see a visible impact in annual data having achieved more than $ 2 B at the end of 2011 but Cost Income ratio stays dangerously unmoved at 57.5% Credit Deposit Ratio is 76%

Asia Pacific is 8 Bln of the Banks 10.6 Bln profits (PBT- IBIT) India PBT is up 32% at $ 515 M from 394 odd in H1 2011 while China profits are up 60% to $454 M, Canada and Brazil though not growing are also larger businesses at $500 M each though Hongkong still tables 40% of the $10.6B PBT at $3.76 B Losses from the sloughed off US business are still a $535 m hit on the bank

Revenues were $34.3 B net of impairment of $4.8B and Operating Expenses mirror last year’s H! increasing a $1 B to $21.2 B Fair Value DVA is $2.7 B without whcih PBT is $14.9 B an increase of 30% from H1 2011 and 150% from the second half of 2011

FTE down 27k from March 2011, 10k from business disposals incl 5000 reductions in Asia outside HK to 273K for the bank. Cost income ratio was up to 63% in Q1 and balanced by a 52% score in Q2 leaving it without improvvements from its redefining strategy and vision program

Loan impairments in the US $2.2 b and Europe at $1B remain the bigger parts of the Impairment charges while RWA is down to $1.16T with improvement in Advances to 76.3% of Deposits

Faster Growing markets identified, contribute 51% of Income. Commercial Banking Income of $4.2 B has a sizable 1.2 B contribution from Europe and North America while revenues of % B in trading including $1.8B from rates and $1.7B from  Forex with $1.5B from ECM & Lending












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This entry was posted on July 30, 2012 by in Amitonomics, Banking, European Sovereign Debt crisis.


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