It reported a fall in underlying loan impairments of $1.1 billion and said it continued to be “watchful” for potential spikes in troubled loans as stresses among key corporate borrowers remained.
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The Asia-focused bank posted a $394 million net profit in the first half, less than in the first half of 2015, but following a .8 billion net loss in the second half.
The bank has marked $100 billion in assets for restructuring or disposal, costs are being cut and the bank’s operating structure has been simplified. A sharp drop in revenue and surging loan impairments drove the Asia-focused lender to its first annual loss since 1989 previous year.
Chief executive Bill Winters said the “environment remains challenging”, with the business adding that it expected its performance this year to remain subdued.
The group appointed a new chairman last week, hiring José Viñals from the International Monetary Fund a year and a half after current chairmen Sir John Peace announced his intention to step down. “The progress we have made has been hard won, and has been achieved against a backdrop of deteriorating external conditions”.
The bank trades at about half its book value after the stock plunged 39 percent in 2015.
Good news on bad loans helped boost early trading in London – shares were up four percent Wednesday morning at 613.20 pence per share.
Winters, who took the helm last June, has shaken up the bank’s top management and pared back the lender, after years of expansion under former boss Peter Sands.
HSBC Holdings Plc, the other United Kingdom bank that gets most of its profit in Asia, said pretax profit fell 45 percent to $3.61 billion in the second quarter from a year ago.
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