HSBC reports profits surge

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

Monday, 3rd August 2015, 10:42 am
A general view of the HSBC Tower in Canada Square, Canary Wharf, London Photo: Anthony Devlin/PA Wire

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 US dollars (£3.3bn).

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.

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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 per cent 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 1.5 billion US dollars (£964 million) this year by 80 per cent by 2021.

HSBC 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.”