Impairment damages HSBC profit
Impairment damages HSBC profit

A rise in bad debts has contributed to a 34 per cent fall in HSBC Australia's first half profit.

The local arm of one of the world's largest banks made a before tax profit of $87 million in the six months to June 30, down from $132 million in the previous first half.

The fall was the result of an impairment on a loan to a single corporation, HSBC Australia chief executive Paulo Maia said on Tuesday.

The bad debt offset otherwise strong performances from the business, he said.

Deposits held by HSBC Australia totalled $19.1 billion at June 30, up 3.4 per cent from six months earlier, and loans totalled $19.5 billion, up 4.2 per cent from December 31.

"HSBC has continued to expand its operations in Australia in 2012, investing in its branch network, growing retail and corporate customer bases and broadening the range of products and services offered in Australia," Mr Maia said.

The overall HSBC group posted better than expected first half results, with before tax profit up 11 per cent on the previous corresponding period to $US12.7 billion ($A12.16 billion).

But the results were overshadowed by a $US700 million ($A670 million) charge to cover the cost of fines imposed in the United States due to HSBC's failure to stamp out money laundering.

Chief executive Stuart Gulliver apologised for the conduct, and described it as shameful and embarrassing.

He also expressed confidence in the growing Asian region, where HSBC generated more than one-third of its first half profit.

The West Australian

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