August 5 - HSBC's pretax profit rose 10 percent to $14.1 billion in the first half, as its three-year cost-cutting plan started to pay off. But earnings fell short of expectations due to a fall in revenue and as Joanne Nicholson reports its shares took a dive.
It looks as though HSBC's cost cutting plan is paying off. Pretax profit at Europe's biggest bank rose 10 percent to more than $14 ($14.1) billion in the first half of the year. But the market saw a drop in HSBC's share price as it learned of a fall in earnings - revenue fell 7 percent to $34.4 billion. It's down to muted growth in western economies AND a slow down in China and Asia, as well as the costs from regulation reforms. BGC's Michael Ingram says, the UK banks' earnings season has seen good share price figures despite some drama from Barclays which last week announced it needed £5.8 pounds from shareholders. (SOUNDBITE) (English) MICHAEL INGRAM, MARKET ANALYST, BGC PARTNERS, SAYING: "You've seen net interest margin edge up, you've seen provisioning coming right back and cost cutting programmes have been proceeding according to plan so yes, I suppose RBS would have to be the weak link there but good numbers from Lloyds and very decent numbers from Barclays also." HSBC's chief executive, Stuart Gulliver, is two and a half years into his plan to streamline the business. He's already cut at least 46,000 jobs and got rid of 52 businesses. He's still continuing the process of pulling out of countries where the bank lacks scale. HSBC's says it will now pay a second interim dividend of 10 cents per share, taking the total for the first half to 20 percent - that's 11 percent more than a year ago.