AIRLINK 62.48 Increased By ▲ 2.05 (3.39%)
BOP 5.36 Increased By ▲ 0.01 (0.19%)
CNERGY 4.58 Decreased By ▼ -0.02 (-0.43%)
DFML 15.50 Increased By ▲ 0.66 (4.45%)
DGKC 66.40 Increased By ▲ 1.60 (2.47%)
FCCL 17.59 Increased By ▲ 0.73 (4.33%)
FFBL 27.70 Increased By ▲ 2.95 (11.92%)
FFL 9.27 Increased By ▲ 0.21 (2.32%)
GGL 10.06 Increased By ▲ 0.10 (1%)
HBL 105.70 Increased By ▲ 1.49 (1.43%)
HUBC 122.30 Increased By ▲ 4.78 (4.07%)
HUMNL 6.60 Increased By ▲ 0.06 (0.92%)
KEL 4.50 Decreased By ▼ -0.05 (-1.1%)
KOSM 4.48 Decreased By ▼ -0.09 (-1.97%)
MLCF 36.20 Increased By ▲ 0.79 (2.23%)
OGDC 122.92 Increased By ▲ 0.53 (0.43%)
PAEL 23.00 Increased By ▲ 1.09 (4.97%)
PIAA 29.34 Increased By ▲ 2.05 (7.51%)
PIBTL 5.80 Decreased By ▼ -0.14 (-2.36%)
PPL 107.50 Increased By ▲ 0.13 (0.12%)
PRL 27.25 Increased By ▲ 0.74 (2.79%)
PTC 18.07 Increased By ▲ 1.97 (12.24%)
SEARL 53.00 Decreased By ▼ -0.63 (-1.17%)
SNGP 63.21 Increased By ▲ 2.01 (3.28%)
SSGC 10.80 Increased By ▲ 0.05 (0.47%)
TELE 9.20 Increased By ▲ 0.71 (8.36%)
TPLP 11.44 Increased By ▲ 0.86 (8.13%)
TRG 70.86 Increased By ▲ 0.95 (1.36%)
UNITY 23.62 Increased By ▲ 0.11 (0.47%)
WTL 1.28 No Change ▼ 0.00 (0%)
BR100 6,944 Increased By 65.8 (0.96%)
BR30 22,827 Increased By 258.6 (1.15%)
KSE100 67,142 Increased By 594.3 (0.89%)
KSE30 22,090 Increased By 175.1 (0.8%)
Markets

HSBC heads for $11bn profit

LONDON : HSBC Holdings Plc should unveil a half-year profit of near $11 billion on Monday, flat from a year earlier as w
Published July 31, 2011

bankLONDON: HSBC Holdings Plc should unveil a half-year profit of near $11 billion on Monday, flat from a year earlier as weak investment bank trading and wobbly US and European economies offset growth in Asia.

New HSBC CEO Stuart Gulliver is overhauling Europe's biggest bank by slashing costs by up to $3.5 billion, selling its US credit card arm and other assets, and retreating from countries where it is sub-scale.

The aim is to sharpen the focus on Asia and investors want to see progress made on that plan.

HSBC is the first of Britain's big banks to report and should show a pretax profit for the six months to the end of June of $10.9 billion, compared with $11.1 billion a year earlier, according to the average of forecasts from 12 banks and brokerages polled by Reuters.

Earnings will be hurt by a slump in fixed income trading in the second quarter, which has hit rivals including Credit Suisse particularly hard. Revenue from HSBC's global banking and markets unit is likely to fall 8 percent on the year to $10 billion, analysts at Citi forecast.

A stuttering US economy could also slow the improvement in bad debts at HSBC's US consumer loans portfolio, which it is running down, analysts said.

Gulliver unveiled his far-reaching plan in May to slash costs and cut back in retail banking to revive flagging profits and returns.

Gulliver intends to sell HSBC's US credit card portfolio, which has more than $30 billion in assets, a move which would free up capital. Capital One Financial Corp and Wells Fargo are among the bidders, sources have said.

Another suitor could be Barclays HSBC is also looking to sell upstate New York branches as it shrinks its network of 475 US branches. Altogether it is looking to sell, shut or slim down retail banking in 39 countries. So far, it has said it will exit Russia and Poland.

The bank is likely to axe thousands of jobs as part of the overhaul, but it is probably too early to see an improvement in the cost line, analysts said.

Pretax profit will include a negative adjustment on the value of debt the bank carries, expected to be around $600 million. Underlying profit of $11.5 billion would be up almost a fifth from a year ago.

 

Copyright Reuters, 2011

 

Comments

Comments are closed.