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HSBC’s pre-tax profit up 10% whilst it agrees Brazilian unit sale

HSBC has announced that its profits climbed 10 per cent to $13.6 billion in the first 6 months of this year, up from $12.3 billion a year ago.

The results have come a little over a month since HSBC announced it would axe up to 8,000 jobs in the UK as part of a global restructuring.

The lender announced on Monday the sale of its Brazilian business to banking giant Banco Bradesco for $5.2 billion, just as the business tries to reduce costs with plans to cut 50,000 jobs.

“The environment for banking remains challenging,” said Douglas Flint, the group’s chairman. He mentioned that economic conditions are uncertain in many parts of the world, and “regulatory workloads have never been higher”.

According to the Financial Times, the bank’s first-half results also contained $1.43 billion in provisions for legal proceedings and regulatory matters. This included an extra $750 million provision to cover the potential cost of investigations into alleged manipulation of the foreign exchange markets by HSBC. It also booked an extra $91 m to cover the cost of compensation for mis-selling payment protection insurance in the UK[1].

However, despite the plan to cut jobs, the workforce grew in the first half of the year by 2,200 as it hired more staff to tackle compliance problems around the world. It employs 260,000 people around the world.

[1] Martin Arnold and Richard Blackden, HSBC agrees Brazilian sale for $5.2bn as profits rise, www.ft.com