August 4, 2008 | posted by Michael Baxter in Banking |

If you wanted to try and encapsulate the two conflicting forces at work today in one company, then that company may well be HSBC.

Its strength is implied by its name: never forget HSBC stands for The Hong Kong and Shanghai Banking Corporation.

But the bank also has strong interests in the US.

And so it was that the bank posted a healthy profit of $10.2bn for the latest quarter, and while all around rivals are tapping shareholders and sovereign wealth funds for money, HSBC has actually upped its dividend payment for the first half of this year on the same period a year ago.

On the other hand, losses from the North American arm came in at $2.8bn and the total amount set aside to cover to bad debt was increased by another $10.1bn.

Profits for the same period last year were $3.9bn higher, so yes, HSBC has suffered a hit. Yes, profits are down. But, it really isn’t that bad,

Chairman Stephen Green said: “It is clear that growth models in our industry based on high and increasing leverage will no longer be sustainable.”

He added: “It is also clear that complexity in financial services and the recent consequences of failed risk management need to be addressed.

“Ultimately the real economy will recover from the crisis although it may get worse before it gets better. Financial markets will not, and should not, return to the status quo ante.”