Strong performance from operations in emerging markets boosted HSBC Holdings' profits by 18% for the first half of 2006 to $12.5 billion.
Basic earnings per ordinary share were up 13% to $0.78 while net interest income of $16.7 billion was 9% higher than the first half of 2005. Operating expenses also rose 12% to $16.1 billion.
Group chairman Stephen Green said: In the first half of the year, HSBC achieved strong revenue growth in new business streams in which we have invested and also in our emerging markets businesses generally.
The London-based bank also said that the global operating environment has been favorable, with a stable US economy and a resurgent Japan counterbalancing the higher interest rates and increased energy costs in most countries.
The bank added that in the UK, the unsecured personal sector again contributed the major portion of the impairment charge in the period, largely as a result of rising bankruptcy filings and individual voluntary arrangements. The charge was in line with that incurred in the second half of last year, however.
HSBC said that it is seeing an improvement in the credit quality of more recent originations. Rival UK lender Alliance & Leicester was also hit by the increase in defaults but similarly predicted that the surge in insolvencies had peaked.