Profits fall in half of HSBC’s key growth markets

HSBC has reported falls in underlying profit in more than half of its 22 key growth markets over the first six months of the year, as cost cuts failed to offset the impact of slowing economies in Asia and Latin America.

Brazil and Mexico posted the steepest profit declines – of 67 per cent and 76 per cent respectively – as bad debt charges increased and economic growth decelerated. HSBC also reported lower underlying profits in several key Asian markets, including China, India, Indonesia and Vietnam.

Of the 22 countries the bank’s chief executive Stuart Gulliver had named as “priority growth areas” three months ago, underlying profits fell in 12. These difficulties helped push HSBC’s shares down by 5 per cent, to 719.7p, making it the biggest faller in the FTSE 100 index yesterday.

Presenting the bank’s half-year results from Hong Kong, chairman Douglas Flint also warned a new European Union cap on bonuses – due to take effect next year – would have a “highly damaging impact” on HSBC’s ability to compete in key markets. – Copyright The Financial Times Limited 2013