HSBC, Europe's biggest bank by assets, says it remains 'confident' about its growth in China as the outlook in Europe and other Western economies is expected to stay 'subdued'.
The bank, which yesterday reported a 11 per cent gain in first-half pre-tax profit, said demand from fast-developing markets including Hong Kong and mainland China would drive its revenue growth.
HSBC remained 'confident of a 'soft landing' in China', where growth was likely to reach or exceed 8 per cent this year, thanks to the mainland authorities' readiness to implement measures including cutting interest rates to stimulate the economy, chief executive Stuart Gulliver said.
Profit before tax stood at US$12.7 billion, which was US$1.3 billion higher than that in the first half of last year. The increase was mainly due to asset sales, it said.
Institutional investors in a Bloomberg survey had expected HSBC to post first-half profit before tax of US$10.9 billion to US$14.2 billion.
Net income fell 8.4 per cent to US$8.4 billion in the six months to June 30 from the same period last year. The company said its capital strength had been bolstered, with the core tier 1 ratio - the ratio of a bank's core equity capital to its total risk-weighted assets - rising to 11.3 per cent from 10.1 per cent at the start of the year and 10.8 per cent a year ago.
HSBC posted a pre-tax loss of US$667 million in Europe, compared with a US$2.15 billion profit in the year-earlier period. Gulliver forecast the euro zone's economy was likely to contract this year.