HSBC led a strong increase in bank shares after the Hong Kong and London-based lender said its half-year profit more than doubled because of a decline in bad debts.
The shares rose by 29.8p, or 4.6%, to 676p by 9:35am. Royal Bank of Scotland gained 2.1p, or 4.2%, to 52p, while Lloyds Bank Group added 2.8p, or 4.1%, to 72.1p. The two bailed-out banks are expected to say this week that they have returned to profit, following their tax-payer funded rescue in 2008.
HSBC said its pre-tax profit more than doubled to $11.1bn, while loan impairment charges and other credit risk provisions were down $6.4bn to $7.5bn, the lowest since the start of the financial crisis.
The company said in a statement: "Despite increasing economic uncertainty towards the end of the period, we saw appetite for credit grow steadily, especially among our business customers. This is now feeding through into lending growth, a trend we expect to continue."
