THE full impact of HSBC's brush with the treacherous bond markets earlier this year will be unveiled when the bank announces its interim results tomorrow. Analysts are expecting a group pre-tax profit for the first six months of around GBP1.35 billion (HK$15.7 billion), 15 per cent up on 1993 but a far cry from the towering 126 per cent growth of the previous year. Earnings from the group's treasury activities are expected to have taken a direct hit in the wake of plunging bond markets sparked by interest rate rises earlier this year. As the US Federal Reserve raised short-term interest rates, bond prices plummeted fuelling speculation in the financial markets that the big bond trading houses were facing heavy losses. Indeed Midland Bank, the British clearer swallowed by HSBC in 1991, was rumoured to be carrying losses of up to GBP1 billion on its books, a figure furiously denied by the bank at the time. Peter Toeman, banking analyst with Hoare Govett in London, has pencilled in a 40 per cent fall in trading profits to GBP240 million from GBP522 million over the same period last year. Mr Toeman and his London colleagues said the bank would not come close to matching last year's securities gains which accounted for nearly 20 per cent of the group's total pre-tax profits. ''That figure [the Midland losses] was way off the mark but there is little doubt that earnings will have been knocked,'' Christopher Ellerton, of S. G. Warburg in London, said. The weaker trading profits are likely, however, to have been offset by lower provisions for bad and doubtful debts at Midland. Britain's three other major British clearing banks - National Westminster, Lloyds and Barclays - have all reported interims showing sharply lower debt provision and Midland is likely to follow suit, according to Maria Chiang, banking analyst with Vicker Ballas. She said provisions could slide by as much as 30 per cent. Hongkong Bank, which accounts for the lion's share of group profits, is expected to show unspectacular growth for the first six months although loan growth is expected to be strong. The slowdown in the property market and correspondingly weaker demand for loans will not be felt until the second half. The group's interim results will also be underpinned by improved results from its principal subsidiaries, including Midland and Midland Marine, the North American arm. Midland Marine has already reported net income for the half year of US$109.7 million (HK$850 million), up 38.3 per cent.