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HSBC up 13%, despite jump in bad debts

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HSBC has reported a 13 per cent rise in first-half profit, despite an increase in bad debts incurred in the US sub-prime mortgage market.

The firm's pre-tax profit stood at $14.16 billion, compared with $12.52 billion for the year ago period.

Analysts polled by Reuters had forecast profits of $13.27 for the London-based bank.

The company's performance was hit by 63 per cent increase in charges for bad debts to $6.35 billion. A year ago, the charges stood at $3.89 billion.

However, this was mitigated by a one-off gain of $1 billion from the partial sale of its holding in mainland China associates.

Meanwhile, the firm's Asia divisions also recorded an "excellent performance" with profits in Hong Kong up 25 per cent.

Growth was also recorded by HSBC's divisions in Asia Pacific, which were up 37 per cent, while its corporate investment banking and markets arm's profits were up 29 per cent to $4.2 billion.

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