HSBC reported a strong increase in profit for the second quarter, driven primarily by a gain from a deferred tax asset.
HSBC posted a profit after tax of $5.8 billion in the second quarter, according to its latest results, up 50 percent from $3.9 billion in the same period last year. Of the $1.9 billion improvement in net profit for the quarter, $1.8 billion was attributable to the recognition of a deferred tax asset.
The bank reported a net operating income of $12.3 billion, down 1.6 percent from $12.8 billion a year ago, as higher net interest income and strong performance in the global banking and markets unit were offset by adverse movement in market impact from life insurance manufacturing and a reduction in markets treasury revenue.
Operating expenses totaled $8.1 billion, down 5.3 percent, while the bank posted a $400 million charge in expected credit losses compared to a net release of $300 million in the second quarter of 2021.
First Half Outperformance
Overall, HSBC posted a pre-tax profit of $9.2 billion in the first half which was down from $10.8 billion a year ago but still beat the average estimate of $8.2 billion, according to analysts compiled by the bank. In Asia where the region continues to face challenges from Covid-related disruptions, the bank registered a pre-tax profit of $6.3 billion in the first half, down 9.2 percent year-on-year.
Performance in 2022 has led to sufficient confidence for HSBC to raise its near-term target for return on tangible equity to at least 12 percent from 2023 onwards.
