HSBC posts 10% gain in pretax profit, but share price falls

HSBC yesterday reported a 10% improvement in pretax profit year-on-year to $14.1 billion in the first half this year, driven by the sizeable cost cuts the bank has made during the past couple of years and lower loan impairment charges.

The underlying profit before tax, which is adjusted for changes in exchange rates, changes in the cost of the bank’s own debt and net gains on the sale of assets, was up 47% to $13.1 billion. The return on average shareholders’ equity increased to 12% from 10.5%.

The bottom line was below the average analyst estimates of $14.6 billion, compiled by HSBC itself, and the bank’s share...