Belfast Telegraph

Increased HSBC profits are boosted by Asian strength

By Staff Reporter

HSBC profits jumped 10% to $13.6bn (£8.7bn) in the first half of the year, beating the initial forecast of $12.5bn (£8bn).

The performance was mainly driven by a strong performance in Asia.

The banking giant also announced the sale of its Brazil banking unit to Banco Bradesco in a deal worth $5.2bn (£3.3bn).

It also confirmed plans to relocate its UK retail operations to Birmingham are running according to plan, and should be completed in three years.

Regarding the potential relocation of its headquarters from London to Hong Kong, the bank said its board would make a decision by the end of this year.

Chancellor George Osborne will be hoping his new tax arrangements, announced in his summer Budget, will be enough to keep it in the UK.

Mr Osborne introduced a new 8% bank surcharge on lenders' profits, largely replacing the existing bank levy by 2020.

Meanwhile, from 2021, the levy, which will be set much lower than its current rate, will only apply to UK rather than group balance sheets.

The levy in its earlier form had been seen as a key reason why HSBC, Europe's biggest bank, said in April that it was considering relocation away from London and possibly back to Hong Kong, where it originated. A large part of its business is focused on Asia.

Brokers at Investec estimate the changes announced by Mr Osborne will slash the lender's bank levy charges of around $1.5bn (£964m) this year by 80% by 2021.

HSBC, whose group chief executive is Stuart Gulliver, said: "We are executing the actions that we announced at our investor update in June and our focus is on making significant progress during the remainder of the year."

The bank also said it was on track with plans to relocate the head office of its UK retail bank from London to Birmingham by 2018 amid new ring-fencing rules separating this part of the group from its investment arm. This part will hold 22,000 UK staff.

It has also said it is to rename the UK retail business, prompting speculation over a return of the Midland brand to the high street more than 20 years after HSBC took over the Midland in 1992.

Belfast Telegraph