The London-based bank could plunge to a first-half loss before tax of US$943 million, from a profit before tax of US$10.25 billion last year, Deutsche Bank analyst Michael Chang said.

HSBC is tipped to book a US$4.7 billion accounting loss because of odd accounting treatment of its rights issue.

Chang expects HSBC will also report US$2 billion of fair-value losses on its own debt, reversing the gains that it booked in previous reporting periods. It will also book losses of US$1 billion in its global banking and markets division, from legacy assets in the United States and Europe, he said.

ADVERTISEMENT

Its core business is expected to hold up relatively well, with an underlying profit before tax of US$5.76 billion, according to the mean forecast of two analysts surveyed by The Standard.

Total operating revenue for the six months ended June 30 is expected to fall 12.8 percent to US$37.44 billion, from US$42.91 billion, while bad-loan provisions are expected to rise 46.1 percent year on year to US$14.7 billion. HSBC's global banking and markets division will report pretax profits jumped 1.2 times to US$6.03 billion, Chang said.

The personal financial services division is expected swing to a pretax loss of US$3.02 billion, from a profit of US$2.31 billion last year.

Goldman Sachs analyst Roy Ramos forecasts pretax profits from Hong Kong to rise 12 percent year on year to US$3.44 billion amid "manageable credit quality."

Pretax profits from the rest of Asia Pacific will fall 7.3 percent to US$3.36 billion, he predicted.

Meanwhile, Morgan Stanley analyst Anil Agarwal estimates that HSBC will still need to provide another US$5.5 billion of capital support to HSBC Finance, its US consumer-lending unit, between 2009 and 2011.

HSBC's first-half results are scheduled to be announced on August 3. BENJAMIN SCENT