HSBC cuts show results, records profits raise 23%

HSBC Holdings posted today a 23% increase in net profit for the first half of the year, as a three-year cost-cutting plan proved successful and loan impairments fell.

According to the bank statements net profit for the first half was $10.28 billion, compared with $8.44 billion in the first half of 2012. Revenue fell 7% to $34.4 billion, as the bank continued to contract businesses. Meanwhile, underlying costs fell 8% on the back of lower fines and charges for the bad sales of products.

However, Chief Executive Stuart Gulliver, sounded a cautious note about Chinese economic growth. “The new emphasis on the quality rather than the quantity of growth is shifting the policy balance away from stimulus and toward reform. We believe this is likely to limit the pace of Chinas growth to 7.4% for 2013 and 2014, which is already being reflected in more modest growth figures in other markets, particularly in Asia,” he said in a statement.

Gulliver is has been rewarded of reversing the lender’s expansion in U.S. consumer banking. HSBC completed the sale of its U.S. credit-card unit to Capital One Financial Corp. for a premium of $2.5 billion in May 2012, and sold a $3.2 billion portfolio of U.S. consumer loans in March.

“Economic growth remained muted and regulatory changes continued to impact available returns but, by focusing on the markets and business areas where we have comparative strength and competitive advantage, we have successfully progressed the re-positioning of the business to accommodate these factors,” Gulliver, 54, said in the statement cited by Bloomberg.

Since 2011, HSBC has been refocusing on key markets. So far, it has sold some 54 business. On Monday, Mr. Gulliver said that the speed of the sell-offs will now slow. HSBC is aiming to shift the banks operations by focusing on high-growth markets in Asia. The firm makes an estimated 90% of its profits outside the UK.

The HSBC shares retreated 3.6% to 737.80 pence at 10:10 a.m. in London trading.