HSBC says it is investing for the future

Its US consumer finance arm, Household International, contributed $1.90bn.

The global bank said its operating performance was ahead of expectations, with "no obvious signs" of a deterioration in future trading.

"We delivered a solid performance in the first half of 2004," said HSBC group chairman Sir John Bond.

The results are a measure of the progress we are making in harnessing the strengths of our business across all geographical regions and all customer groups Sir John Bond, HSBC chairman Track HSBC shares today

"Indeed, the absolute level of profits was the highest we have achieved in a six-month period."

The bank, which is in talks to buy 19.9% of Bank of Communications in China, said on Monday it had reached agreement in principle on the terms of the investment.

Meanwhile, HSBC's Hong Kong affiliate, Hang Seng Bank, saw first-half profit rise 24% after a large write-back in bad debt provision.

"Disciplined management"

HSBC has operations in the UK, Europe, Asia and the Americas.

"Our results reflect sound underlying revenue growth, a disciplined management of costs while investing for the future, and improved productivity," said Sir John.

"They are also a measure of the progress we are making in harnessing the strengths of our business across all geographical regions and all our customer groups."

In March, HSBC announced a record annual pre-tax profit of �6.86bn ($12.8bn).

Its figure for 2003 was the highest recorded by a UK-based bank, and represented a 33% increase on 2002.