HSBC recorded pre-tax profits of $11.47 billion (£6.99 billion) in the first half of 2011, in what it termed as the 'first step in the right direction of what will be a long journey'.

The worldwide bank, with operations in Asia, Latin America, the Middle East, Europe and North America, said its earnings were up 3.3 per cent on the first half of 2010.

HSBC warned that having already reduced headcount by around 5,000 since the turn of the year, it was now targeting a further $2.5-3.5 billion (£1.52-2.13 billion) in sustainable cost savings by 2013.

FTSE 100-listed HSBC, the first of the 'Big Four' banks to report this season, said good progress had been made during the first six months of the year in setting the course to build further sustainable value from the business.

Douglas Flint, group chairman at HSBC, said the bank's clear focus is to concentrate its capital allocation and resources on the market segments it is best able to serve competitively and efficiently.

During the period, it announced the closure of retail banking in Russia and Poland and the disposal of three insurance businesses.

It said the cost efficiency ratio in the first half was 57.5 per cent, compared to 50.9 per cent at the same time last year and 59.9 per cent in the second half of 2010.

Loan impairment and other credit risk provisions were $5.3 billion (3.23 billion) in the period, down 30 per cent on the first half of 2010 and 19 per cent on the second half of last year. The core tier one capital ratio increased to 10.8 per cent from 10.5 per cent over the six months.

Specifically profit in retail banking and wealth management was up 131 per cent and commercial banking profit was up 31 per cent. But, global banking and markets profit presented a slight drag, down 12 per cent on the first half of last year.

The bank also announced the disposal of 195 non-strategic branches in the US, following a strategic review of the credit card business over there.

Dividends declared in respect of 2011 totalled $0.18 (£0.10) per ordinary share, up 12.5 per cent on last year.

Nick Raynor, investment adviser at The Share Centre, continues to recommend HSBC as a 'hold'.

He comments: 'The 4 per cent rise in the share price following the better than expected figures may come as a relief to investors. Concerns may also be eased slightly by the news that the US is likely to come to an arrangement over its debt crisis. However, there are still concerns that the country’s debt rating could be lowered, which will again send markets into uncertain trading patterns.
 
'We feel the positive figures do not go far enough to offset this uncertainty and the tough times the bank faces. We therefore do not recommend any further investment at the moment and continue to list HSBC as a "hold".'