HSBC profits and revenue rise due to strong Asia performance despite Trump trade war fears

Shares in the bank sank in early trading after it revealed rising costs

HSBC’s profits and revenues grew in the first half of the year, after a strong performance in Asia despite escalating trade tensions between the US and China in recent months.

The bank reported revenue of $27.3bn (£21bn) for the six months to 30 June, up 4 per cent compared with the same period of last year, while pre-tax profit rose 4.6 per cent, from $10.2bn to $10.7bn, with Asia accounting for nearly 90 per cent of profit for the group.

HSBC said it remains “cautiously optimistic” for global growth in the rest of the year, and highlighted the fact that “the fundamentals of Asia remain strong despite rising concerns around the future of international trade and protectionism”.

However, shares in the lender dropped 1 per cent in early trading as the group reported an increase in operating expenses for the first half, with costs rising 7 per cent, from $16.4bn to $17.6bn. The group said this was due to investment aimed at growing the business, as well as continued investment in the bank’s digital proposition.

Thomas Moore, a fund manager at Aberdeen Standard Investments told the BBC on Monday that increasing costs was “the main bugbear” for HSBC shareholders at the moment. “You've got a bank that's back on its feet but then again you've got inflationary pressures. In Asia, things are hotting up a bit and therefore it is getting more expensive to hire people," he said.

John Flint, group chief executive, said: "Today's results, which are in line with our expectations, show strong revenue growth in our global businesses.

“This is creating room to invest while maintaining our commitment to full-year positive adjusted jaws. We are investing to win new customers, increase our market share, and lay the foundations for consistent growth in profits and returns."

Steve Clayton, a fund manager at investment group Hargreaves Lansdown, said the time has come for HSBC to start delivering on growth targets set out in recent years.

“The potential for growth from China and the wider South East Asian region ought to be good and HSBC has long thrived from financing global trade flows,” he added.

“But in a world of tit-for-tat sanctions between the global powers, it could become harder for HSBC to benefit from its deep Asian roots.”