Profits of the banking company HSBC have seen a 100% rise in the first half of the year as they benefited from the economic recovery in Britain and Hong Kong.
Europe’s largest bank reported pre-tax profits for the current period rising to $ 10.8bn (£ 7.8bn), compared to $ 4.3bn over the same period last year.
All Branches Remained Profitable
The UK-based bank said all of its branches were profitable during the time.
These figures come as the global economy recovers from the impact of the coronavirus pandemic.
“I’m pleased with the momentum generated around our growth and transformation plans, with good delivery against all four pillars of our strategy. In particular, we have taken firm steps to define the future of our US and continental Europe businesses”, said HSBC chief executive Noel Quinn.
The lender also reported that the UK bank reported profits before tax of more than $ 2.1bn at this time.
Recovery In Major Markets
Given an impetus by economic growth in its two major markets, Britain and Hong Kong, the bank announced dividend payments to shareholders.
It plans to pay an interim seven cents per share dividend after Bank of England last month lifted restrictions on such payments to stakeholders.
However, Laura Foll, the UK’s income fund officer at Janus Henderson Investors, told the BBC that the most important factor in increasing HSBC’s profit margins was the lower than the expected losses on loans during the pandemic.
Provision For Doubtful Debts
She explained that last year many banks set aside fund reserve based on how much they could lose if a loan collection failed and its customers did not repay it. In the case of HSBC, it has set aside $ 700m.
“In all cases, the banks are now rolling back on that number… and it is that number that has boosted the profitability at HSBC more than any other improvement.”
