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. Last Updated: 07/27/2016

HSBC Profits Rise 18% on Investment Banking Growth

LONDON -- Europe's biggest bank, HSBC Holdings, beat analysts' median forecast Monday with an 18 percent rise in first-half profit, spearheaded by strong growth at its investment bank and in emerging markets.

The London-headquartered bank said it made a pretax profit of $12.52 billion in the six months to the end of June, up from $10.64 billion a year ago and well above the median forecast of $11.52 billion from 11 analysts polled by Reuters.

HSBC, whose operations span 77 countries, said pretax profit at its investment banking business, or CBIM, jumped 37 percent, with a gap of 12 percent between revenue growth and cost growth.

"CIBM was probably the stand-out performer. The investment phase that came to a peak last year moved into the execution phase this year, which had a very significant impact on profits," Douglas Flint, finance director, said in a conference call.

CIBM's revenue jumped by a quarter to $6.86 billion, outpacing a 13 percent rise in costs to $3.74 billion, which was mainly due to higher bonuses to staff. HSBC has already said cost growth in the unit would slow after four years of heavy investment.

HSBC said a positive outlook for the world economy left it well positioned to sustain growth.

"We think the global economy remains fundamentally strong -- the U.S. is growing, Japan is growing, China is moving intensely. We're dependent on what happens with the global economy, but we're very pleased with the way we're positioned," Flint said.