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Two UK main banks report combined half year profits of £ 6 billion

Tuesday, August 4th 2009 - 09:33 UTC
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The two banks underscored their performances in spite of adverse conditions, but they are also in the list called for “robust” discussions on lending with the UK Treasury The two banks underscored their performances in spite of adverse conditions, but they are also in the list called for “robust” discussions on lending with the UK Treasury

British banks Barclays and HSBC have shrugged off the near-collapse of the financial system to report combined half-year profits of almost £6 billion. The duo - which both avoided taxpayer support at the height of last autumn's crisis - posted profits of nearly £3 billion each, mainly due to strong investment banking results.

But both banks also bore the scars of almost £13 billion in bad debts as consumers and businesses hit by recession default on loans.

Barclays' write-downs rose 86% to £4.56 billion, while HSBC's were up 39% to 13.9 billion US dollars (£8.3 billion). Shares in both banks gained 6% - helping push the wider FTSE 100 Index 1.5% higher - as both bucked the impact of a global downturn.

Barclays said it had made a “good start” to 2009 as it sought another year of “solid profitability”. HSBC said the results proved its ability to make profits “even in challenging market conditions”.

Barclays lent around £17 billion to UK households and businesses in the first half of the year, while HSBC lent £6.7 billion of £15 billion committed for new mortgage lending in the UK.

But the duo were among several major banks called in by Chancellor Alistair Darling for “robust” discussions on lending last week as the UK's credit-starved economy thrashes in recession.

HSBC - which saw profits fall 63% to 9.3 billion dollars (£6.5 billion) last year - bolstered its finances with a record £12.5 billion rights issue in March.

Barclays - which has raised cash from the Middle East - has also agreed the sale of its BGI asset management division. Barclays' figures revealed a 36% jump in staff costs to £4.8 billion - led by a 32% jump in salaries and bonuses at investment banking arm Barclays Capital, after it bought the US division of failed Lehman Brothers. HSBC also reported a rise in performance-related pay at its Global Banking and Markets operation.

Categories: Economy, International.

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