HSBC profits better than expected at €10bn

Banking giant HSBC posted forecast-beating profits today as its Asian and commercial banking businesses offset tougher conditions in the UK and US.

The company posted pre-tax profits 13% higher at $14.16bn (€10bn) for the first half of 2006.

HSBC is the first of the “Big Five” banks reporting results this week. The banking giants are expected to post more than £20bn (€29bn) in pre-tax profits between them.

As the bank hailed its profits performance, it added that it would ``strongly defend'' its overdraft fees after the Office of Fair Trading (OFT) launched legal action against eight banks including HSBC last Friday.

HSBC said it considered that the charges were “valid and enforceable”, although it added that it was impossible to predict the outcome of the legal action accurately.

The bank said: “On the basis of the facts currently available and the advice received, the financial impact on HSBC is not considered to be material.”

The OFT has been investigating overdraft fees since March after tens of thousands of consumers complained about the charges.