: business

||| MARKETS. Triggered by bad U.S. mortage loans

HSBC reports 1H fall in profit

||| HSBC Holdings Plc, Europe’s biggest bank by market value, reported the steepest earnings decline since 2001 on record subprime mortgage defaults in the U.S. ||| The bank said it had a 29 percent loss for the first half of the year. ||| It said most part of the losses came from the U.S.

Emily F. Vencat | AP Business Writer

LONDON – HSBC Holdings PLC, Europe's largest bank by market value, reported on Monday its steepest fall in profit since 2001 as costs for bad U.S. mortgage loans mounted.
Net profit for the first half of the year plunged 29 percent to $7.7 billion from $10.9 billion in profit in the January to June period of last year.
"The first half of 2008 saw the most difficult financial markets for several decades, marked by significant declines in profitability throughout much of our industry," said HSBC Chairman Stephen Green. "HSBC was not immune from the turmoil."
The biggest losses came from the North American market, which HSBC depends on for a quarter of its revenue. Operations there posted a first-half loss of $2.9 billion, compared with profit of $2.4 billion a year ago.

One of the positive signs in the earnings report was “the continuing strength in the retail businesses in the developing markets.”

Part of the blame lies with Illinois-based Household Inter-national Inc., a lender HSBC purchased in 2003 that elevated the British bank to the unenviable position of biggest United States subprime mortgage lender. Still, HSBC has weathered the global financial storm with better than some others.
In May, the bank reported that first-quarter 2008 profit was actually better than the same period last year, despite a $3.2 billion write-down on subprime mortgage assets in the United States.
Today's half-year results compare favorably with what other British banks are expected to report later this week in their own half-year earnings results.
On Friday, analysts are expecting the Royal Bank of Scotland to report the largest loss in British banking history – of between 1 and 1.5 billion pounds ($2 billion to $3 billion).
Operations in the Asia-Pacific region, excluding Hong Kong, reported a pretax profit of $3.6 billion, up 8 percent on the $3.3 billion the company made in the first half of 2007.
One of the positive signs in the earnings report was "the continuing strength in the retail businesses in the developing markets," HSBC's finance director, Douglas Flint, said in a conference call on Monday morning. ||| 

||| MARKETS. Following crude’s slump

Street ends in the red

Tim Paradis | AP Business Writer

NEW YORK – Wall Street fell moderately on Monday in an erratic session dominated by worries about inflation – which were somewhat soothed by a steep drop in the price of oil (See related story on P. 11).
The Dow Jones industrial average fell 42.17, or 0.37 percent, to 11,284.15. The Dow had been down more than 100 points in early trading. Broader stock indicators also declined. The Standard & Poor's 500 index fell 11.30, or 0.90 percent, to 1,249.01, and the Nasdaq composite index declined 25.40, or 1.10 percent, to 2,285.56.
The Russell 2000 index of smaller companies fell 12.02, or 1.68 percent, to 704.14. Declining issues outnumbered advancers by about 2 to 1 on the New York Stock Exchange, where volume came to 1.23 billion shares.
Overseas, Japan's Nikkei stock average fell 1.23 percent. Britain's FTSE 100 fell 0.64 percent. Germany's DAX index fell 0.73 percent, and France's CAC-40 lost 0.78 percent. |||

||| AIRLINES. Hitting the lowest level since 2003

Passenger demand slows

The Associated Press

WASHINGTON – International air cargo volume fell in June, while passenger demand growth slowed, the International Air Transport Association said on Monday, citing global economic woes. Cargo contracted by 0.8 percent compared to June 2007. It was the first such decline seen since May 2005 and follows several months of falling manufacturing sector confidence indicators.
Passenger demand growth fell to 3.8 percent, the lowest level since 2003, IATA said.
Passenger load factors dropped to 77.6 percent, 1.2 percentage points below the 78.8 percent recorded for June 2007.
IATA said the situation could get worse with consumer and business confidence falling and persistently high oil prices. It also noted that the airline sector is in trouble, with billions of dollars in losses expected this year.
IATA represents 230 airlines comprising 93 percent of scheduled international air traffic. |||