British financial services major HSBC Holdings Plc has reported a 57 per cent plunge in profit at $3.35 billion in the first half of 2009, hit by the ballooning loan impairment charges in many markets including India.
HSBC's profit plummeted 57 per cent to $3.35 billion for the six months of the current fiscal. In the comparable period, the same stood at $7.72 billion, it said in a statement today.
The entity which has battled the financial meltdown without taxpayers money, saw loan impairment charges and other credit risk provisions climb 39 per cent to $13.9 billion as compared to the same period a year-ago.
"Reported loan impairment charges and other credit risk provisions were $13.9 billion, an increase of 39 per cent compared with the first half of 2008," the firm noted.
The group's pre-tax profit slumped 51 per cent to $5.02 billion for the first six months of 2009. In the year-ago period, it had a pre-tax profit of $10.25 billion.
New loan impairment allowances shot up by 78 per cent to $600 million in certain parts of Asia, primarily due to deterioration in credit quality in credit cards and personal loans within the personal lending portfolio in India, and on a number of commercial exposures.
"Impaired loans in the region (Rest of Asia-Pacific) rose by 59 per cent from December 31, 2008 to $1.3 billion, driven by downgrades in a broad range of commercial exposures particularly in India," the statement said.
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Noting that economic outlook remains highly uncertain, HSBC Group Chairman Stephen Green said that operating conditions in the financial sector have continued to improve as the effects of government and central bank policies work through the system.
"...It may be that we have passed, or are about to pass, the bottom of the cycle in the financial markets," Green added.
During the first six months of 2009, the firm successfully integrated the operations of IL&FS Investsmart in India, which has added 77 outlets to HSBC's wealth management business.
In April 2009, HSBC raised as much as $17.8 billion through a rights issue, which helped the company to bolster its capital in the wake of the raging financial turmoil.