HSBC and Barclays profits set to dip as RBS heads for loss

By Steve Slater

LONDON (Reuters) - Europe's biggest bank HSBC (HSBA.L) is expected to report a 28 percent drop in profit as it spearheads results showing how Britain's top four banks are coping with a global credit crunch.

HSBC is on Monday expected to report a first-half profit of just over $10 billion (5 billion pounds), down about $4 billion, based on the average of seven analysts' forecasts. Strong growth in Hong Kong, elsewhere in Asia, and Latin America will be held back by losses on U.S. mortgages.

Asia-focused bank Standard Chartered (STAN.L) is expected to report a 21 percent rise in first-half profit on Tuesday. But Barclays (BARC.L) is forecast to show a 36 percent profit drop on Thursday and Royal Bank of Scotland (RBS.L) is forecast to post a loss when it reports on Friday.

HSBC has outperformed most rivals this year due to its strong capital, funding and liquidity and its exposure to faster-growing emerging markets.

It should show a resilient performance, but its impairments on U.S. mortgages are expected to reach about $7 billion, after a $3.2 billion charge for Q1, dragging North America to a loss.

HSBC also took a $2.6 billion writedown on assets held by its investment banking arm in the first quarter, but that was offset by strong revenue growth in the business, which may have slowed.

Investors will be keen to hear if HSBC plans to take advantage of its relatively strong position and whether it plans to continue with the $6.3 billion purchase of a majority stake in Korea Exchange Bank.

"Although slowing economies in the U.S. and Europe and inflation fears in Asia will undoubtedly slow earnings momentum, these could also provide attractive opportunities for capital deployment," Tom Rayner, analyst at Citi, said in a note.