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HSBC sees profits tumble 12% to £7.3bn

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HSBC, the largest listed bank in the UK, has reported a sharp drop of 12% in its first half profits for 2014, as declines in emerging markets impacted the group.

HSBC reported pre-tax profits of $12.3bn (£7.3bn), down from $14.1bn the previous year.

Revenues fell 4% to $31.4bn as global economic growth slowed, particularly in emerging economies where the bank is heavily exposed. It generates two-thirds of its profits from Asia.

During the half-year the bank added it also put aside $234m for its “customer redress programmes”, to cover the cost of mis-selling Payment Protection Insurance (PPI) and other events.

The bank – which can count Neil Woodford among its more famous backers – said it hoped to reduce the “severity of future customer redress” costs.

However, the redress figure is down from the $412m set aside in the first half of 2013.

Stuart Gulliver, HSBC group chief executive, said: “These results demonstrate the resilience of our business model. Whilst regulatory uncertainty persists, our balance sheet remains strong and our continuing ability to generate capital supports both growth and our progressive dividend policy.”

Shares in the group dipped initially after it released its results, but are currently up over 1% 7.9p at 637p, topping the FTSE 100 leader board.

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