Banking giants Barclays and HSBC have both managed down costs and achieved better than expected results for the first half of 2009.
HSBC said it has cut costs by three percent, Barclays also reported a saving of three percent.
HSBC Holdings, the parent company, said its total operating expenses were down by 17 percent to $16,658 million. This is a cost efficiency ratio of 47.9 per cent, last year's ratio was 51.0 percent.
Barclays announced an eight per cent rise in profits, driven by its successful investment banking division. Last year Barclays acquired the assets of failed US bank Lehman Brothers. Pre-tax profits at Barclays were £2.98 billion for the first six months of the year.
HSBC reported a pre-tax profit of $5 billion (£3bn), a decrease of $5.2 billion, or 51%, compared with the first half of 2008. Profits at HSBC halved in the first half of the year after it was dragged down by huge write-offs on its North American mortgage and credit card businesses.
The personal banking arm of HSBC reported a loss of $1.2bn. Commercial banking at HSBC reported a profit of $2.4bn, but this was a decline of 47 per cent compared to same period last year.
In March, HSBC announced plans to cut 1,200 operational and IT staff from its retail division as part of a 12 month review into efficiency. Union body Unite has accused HSBC of planning to outsource many of these roles to India. HSBC investment back has also extended its outsourcing contracts with Capgemini and cut its IT workforce by 500 in December 2008.
The bank will hope the results will offset some of the bad publicity that followed a record £3 million fine by the Financial Services Authority. The City watchdog issued the fine after three of the banks businesses – HSBC Life UK, HSBC Actuaries and Consultants Limited and HSBC Insurance Brokers – lost confidential customer details.
Earlier this year Barclays announced that its UK IT workforce would be cut by 700.