HSBC Reports 12-Percent Rise in Half-year Net Profit

HONG KONG, August 2 (Xinhua) -- Banking giant HSBC Holdings plc Monday announced that the group's net profit in the first half of 1999 rose 12 percent to 2.694 billion US dollars owing to strength of the Western economies and recovery in Asia.

The London-based group said its profit before tax was 4.068 billion US dollars in the first six months of the year, up 382 million US dollars or 10 percent, over the same period in 1998.

"Our (year-on-year) results for the first half of 1999 reflect the continuing strength of the Western economies and a degree of recovery in some emerging markets," HSBC chairman John Bond said in a statement.

"The results also indicate solid progress in implementing our strategy of 'management for value'," which HSBC adopted after its slump in profits in 1998 due to hefty provisions for bad and doubtful debts in crisis-hit Asia.

HSBC Holdings' charge for bad and doubtful debt fell 64 million US dollars from the first six months of 1998 to 1.082 billion U. S. dollars. The figure was 409 million US dollars lower than for the second half of 1998.

The directors have declared a first interim dividend for 1999 of 0.133 US dollars per ordinary share, an increase of 8 percent.

HSBC Holdings plc reported a net interest income of 5.913 billion US dollars, 262 million U.S. dollars or 5 percent higher than the same period in 1998. Other operating income rose by 179 million US dollars or 4 percent to 4.497 billion U.S. dollars.

The group's cost-to-income ratio improved marginally to 52.0 percent from 52.2 percent in the same period in 1998. The total assets of the group at June 30, 1999 were 497 billion US dollars, an increase of 13 billion US dollars or 3 percent since year-end 1998.

Net interim profit at HSBC's subsidiary, Hongkong and Shanghai Banking Corp. Ltd. (Hongkong Bank), was up 39.7 percent year-on- year to 8.509 billion HK dollars (1.09 billion US dollars).

Net profits in the period for Hang Seng Bank Ltd., a unit of Hongkong Bank, rose 12.1 percent year-on-year to 4.261 billion HK dollars (546 million US dollars).

"The outlook for the rest of 1999 still remains dependent on the continuing strength of the US economy and the revival of demand in our major markets in Asia," said Bond.

HSBC is determined to build on its major presence in Asia although the first half of 1999 saw some important developments for the group in the United States and Europe, he added.