HSBC, the UK’s largest bank, has reported a 28% fall in profits and has warned the financial markets are “the most difficult for several decades”. The bank reported its results for the first half ended June 30 today (August 4).
It has posted a fall in profits to £5.2bn in first six months of this year, propelled by a £5.3bn bad debt write-off in its struggling American business.
HSBC chairman Stephen Green says the first half of 2008 saw “the most difficult financial markets for several decades”, with significant declines in profits for much of the banking industry. He also adds that the situation is likely to get worse before it gets better.
In the US, HSBC’s financial services arm made a $2.2bn (£1.12bn) loss over the period. It is taking steps to reduce further loss by cutting down future loans for vehicle financing and reducing the size of its branch network.
The bank has taken $15.4bn (£7.8bn) of provisions in the last 15 months, including the risk that mortgages and credit card borrowings to credit crunch inflicted Americans would not be repaid.