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| US worry fails to hit HSBC profit | US worry fails to hit HSBC profit |
| (20 minutes later) | |
| HSBC, the UK's largest bank, has seen half-year profits rise 13% to $14.15bn (£6.97bn) despite worries about the impact of the US housing market slump. | HSBC, the UK's largest bank, has seen half-year profits rise 13% to $14.15bn (£6.97bn) despite worries about the impact of the US housing market slump. |
| The firm said it had benefited from strong growth in Asia and a healthy performance from investment banking. | The firm said it had benefited from strong growth in Asia and a healthy performance from investment banking. |
| But it said bad debt levels had risen in the US where the housing market faced "considerable difficulties", particularly in the sub-prime sector. | But it said bad debt levels had risen in the US where the housing market faced "considerable difficulties", particularly in the sub-prime sector. |
| US authorities have warned sub-prime related losses could reach $100bn. | US authorities have warned sub-prime related losses could reach $100bn. |
| Renegotiating loans | Renegotiating loans |
| Profits at the bank's US business were 43% lower than the same period last year, reflecting its exposure to a growing number of people unable to meet their mortgage payments. | Profits at the bank's US business were 43% lower than the same period last year, reflecting its exposure to a growing number of people unable to meet their mortgage payments. |
| Bad debt levels related to mortgage defaults totalled $760m during the period, but HSBC said total reserves set aside to cover bad debts remained largely unchanged at $2.1bn. | Bad debt levels related to mortgage defaults totalled $760m during the period, but HSBC said total reserves set aside to cover bad debts remained largely unchanged at $2.1bn. |
| HSBC said it had been successful in managing sub-prime losses | HSBC said it had been successful in managing sub-prime losses |
| Changes to the bank's sub-prime business, which saw HSBC stop underwriting riskier sub-prime mortgages and renegotiate thousands of customer loans, saw overall US profits improve compared with the second half of 2006. | Changes to the bank's sub-prime business, which saw HSBC stop underwriting riskier sub-prime mortgages and renegotiate thousands of customer loans, saw overall US profits improve compared with the second half of 2006. |
| "We have contacted 19,000 customers and have modified the loans for over 5,000 of them, benefiting both our customers and our business," the bank said. | "We have contacted 19,000 customers and have modified the loans for over 5,000 of them, benefiting both our customers and our business," the bank said. |
| HSBC said the global credit market had remained favourable in the first half of 2007 but that it remained alert "to the probability of a change in sentiment" in the near future. | HSBC said the global credit market had remained favourable in the first half of 2007 but that it remained alert "to the probability of a change in sentiment" in the near future. |
| Concerns about rising interest rates in most industrialised economies, allied to fears about the strength of the US economy, have caused turbulence in global stock markets in recent days. | Concerns about rising interest rates in most industrialised economies, allied to fears about the strength of the US economy, have caused turbulence in global stock markets in recent days. |
| Bank charges | Bank charges |
| Separately, HSBC said the cost of refunding British bank customers who claimed they had been overcharged for bank overdraft fees had risen to £116m. | Separately, HSBC said the cost of refunding British bank customers who claimed they had been overcharged for bank overdraft fees had risen to £116m. |
| The size of the refunds we have made demonstrate our commitment to treating our customers in a fair and transparent matter HSBC on bank overdraft cases | The size of the refunds we have made demonstrate our commitment to treating our customers in a fair and transparent matter HSBC on bank overdraft cases |
| Customers have launched a series of court actions against the UK's top High Street banks, arguing that their overdraft charges are unreasonable and illegal. | Customers have launched a series of court actions against the UK's top High Street banks, arguing that their overdraft charges are unreasonable and illegal. |
| The banks have settled thousands of complaints out of court. | The banks have settled thousands of complaints out of court. |
| "This is an industry-wide issue and the size of the refunds that we have made demonstrate our commitment to treating our customers in a fair and transparent matter," it said. | "This is an industry-wide issue and the size of the refunds that we have made demonstrate our commitment to treating our customers in a fair and transparent matter," it said. |
| The Office of Fair Trading's decision to challenge fees for unauthorised overdrafts in court - a case which could set a legal precedent for such claims - was welcome, HSBC added. | |
| HSBC shares rose 2.5% in early trading in London after analysts breathed a sigh of relief that the bank's exposure to unrecoverable debts was not higher. | |
| "Although bad debts have surged, emerging market related profits have more than compensated," said Keith Bowman, from Hargreaves Lansdown stockbrokers. | |
| "HSBC continues to prove that its strategy for both geographical and customer diversification is working." |