Business

HSBC: Bad debts fall as US operation returns to profit

HSBC sign
Image caption HSBC is seeing improvements but remains cautious

HSBC says bad debts on its books are at their lowest level for two years, with its troubled US operation making profits for the first time since 2007.

Europe's largest bank also said that underlying pre-tax profits for the first quarter of 2010 were "comfortably ahead" of the last quarter of 2009.

The bank said that although economic "strains" persisted in Europe, recovery in Asian markets "looks secure".

HSBC's shares were the FTSE 100's biggest riser, trading up 5% at 660p.

The bank does not issue full quarterly profits, so the quarterly trading updates are closely watched.

HSBC said the finances of its personal and corporate customers were improving, meaning bad debt costs were at their lowest quarterly level for more than two years.

'Alert'

Chief executive Michael Geoghegan said: "Although we remain alert to the impact of strains being seen in Europe, the emerging market trends are developing well.

"It is good to be able to report a pre-tax profit in the US in the first quarter - the first quarterly profit since 2007.

"It is too soon to declare victory, but the improvement in the quarter is testament to the actions of our management team since we identified the problems in the US consumer finance market."

Pre-tax profits in Hong Kong and the Asia Pacific region were "encouragingly higher" in the three months to March, compared with the same quarter last year, he said.

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