IT is just 11 days before HSBC announces its interim profit results and bank analysts are now making their final forecasts ahead of the August 15 announcement. Despite niggling concerns over losses in Midland's treasury operations, most analysts are expecting a good result for the banking behemoth. The better-than-expected results from County NatWest in Britain have added to speculation that HSBC results will be stronger than previously thought. UBS Securities managing director John Mulcahy said: ''The good results from NatWest have had an effect on the London market's view on bank earnings. ''NatWest's reduction in provisions against bad debts is a marker to the market and will probably be the approach taken by other banks,'' he said. UBS forecasts an interim profit of $11.3 billion. County NatWest's profit growth was attributed to a faster than expected decline in bad debt provisions, but not all analysts are convinced that this will be reflected in HSBC's results. ''You have to look at it in context,'' said a London analyst. ''NatWest was good, but Lloyds had results lower than forecast,'' she said. The key concern is still trading losses on securities at Midland Bank. Earlier this year, HSBC moved to reassure the market that overall the group's treasury operation had not made a loss, but the ambiguous statement did not address the concerns specific to Midland. In April, a series of faxes emanating from Midland Bank said the bank had lost up to GBP1 billion (about HK$11.86 billion), a rumour emphatically denied by senior Midland officials. Some analysts believe Midland has been able to recover and will not report a loss, but others are not so sure. James Capel Asia research director Philip Niem said investors would be looking for four key pieces of information on August 15. They are how quickly bad debts are coming down; how much will dealing profits be affected; how much have costs been brought under control since the merger; and how interest income has been affected since the rise in rates in February. ''The results from Bank of East Asia show that interest income in Hong Kong is under pressure,'' said Mr Niem. The question of treasury performance was also important because treasury operations contributed 14 per cent of HSBC's profits compared to seven per cent for County NatWest. James Capel estimates that a GBP222 million reduction in dealing profits over the half-year will be compensated for by tight control over costs due to savings from the merger, a 10 per cent increase in net interest income coming mainly from Asia, and a GBP57 million reduction in provisions. Other analysts agree treasury operations will be the key. Hoare Govett bank analyst Peter Boeman said he would be looking for the movement in dealing gains. ''Midland Bank made GBP350 million from swap transactions and we will be looking to see whether that is sustainable. ''Our feeling is that a lot of the securities gains will not be recurring,'' he said. Last year, securities trading represented about 30 per cent of Midland's profit. Hoare Govett forecasts a before tax interim profit of GBP1.35 billion and a full year profit of GBP2.8 billion. Mr Boeman said analysts would also be watching for the effect the breaking up of the interest rate cartel would have on earnings down the track. ''In the United Kingdom, banks are used to dealing in a deregulated market, but in Hongkong Bank's case it would be moving from regulation to deregulation,'' he said. Kleinwort Benson has forecast a before tax interim profit of GBP1.37 billion and a full year forecast of GBP3.02 billion because of slightly faster loan growth.