HSBC shares surge as profits beat forecasts
HSBC Holdings, the world's second biggest bank, unveiled consensus-beating first half profits today thanks to its purchase of Household International, sending its shares to a 13-month high and boosting European markets.
HSBC, based in Britain and with operations around the globe, reported a 21 per cent jump in pre-tax profit for the six months to June 30th of $6.11 billion from $5.06 billion a year earlier.
That compared with a consensus forecast of $5.62 billion, according to the average of seven analysts.
HSBC's shares surged to the top of the FTSE 100 gainers board and by 9.20 (Irish time) were up 2.7 per cent at 785 pence, earlier hitting a high of 792p, their highest level since June 2002.
The stronger-than-expected profits from HSBC also breathed fresh life into what had been a sluggish London stock market, with the FTSE 100 of leading shares rising 0.8 per cent.
HSBC said it expected savings of $1.2 billion a year from Household International, the second-biggest US consumer-finance company, which it acquired for about $14 billion in March.
The savings comprise $1 billion in cheaper borrowing for Household using HSBC's higher credit rating and $200 million from integrating computer systems and cutting central costs.