Despite questionable ethics, HSBC reports H1 net profit surge of 22%

Shares fall, however, on concerns about China’s growth.

HSBC PLC said yesterday that its first half profit rose 22% to US$10.3 billion in the first half from US$8.4 billion year-on-year.

The bank sold a US$3.7 billion non-real estate loan portfolio. It also announced 11 disposals or closures of non-strategic businesses since the start of the year, moves it said would continue to reshape HSBC.

The bank said it cut costs by US$800 million during the period, taking annual savings to US$4.1 billion since the start of 2011,

Analysts said HSBC, Europe's biggest bank by market value, benefited from restructuring measures and reduced loan losses in the United States.

In the USA, HSBC loan impairment charges were cut to US$1.3 billion, or 29%, compared to the first half of 2012. The decrease reflected improvements in the housing market and lower delinquency levels.

Chief Executive Stuart Gulliver said the bank's priority is to implement a global standard of conduct and compliance. The focus on ethics comes after the group agreed to pay almost US$2 billion last year to settle a money-laundering case involving illicit drug money from Mexico.

Analysts noted that HSBC’s view that China has moved from a stimulus agenda to one focused on reform suggests that the outlook for growth in China and the surrounding region may be more muted than management had previously anticipated.