HSBC Infrastructure profits rise

AMSTERDAM (Reuters) - HSBC Infrastructure, the banking group's listed infrastructure fund, on Thursday posted a sharp rise in first-half profits and hiked its interim dividend as portfolio performance improved.

Pre-tax profit for the six months to end-September rose 89 percent to 8.5 million pounds helped by favourable interest rate swap, inflation swap and bond indexation movements.

The fund, which earlier this month announced plans to raise new capital to pay down debt and help fund deals, said it would press on with expanding its portfolio to 500 million pounds and beyond. It valued it at 464.5 million pounds as of September 30.

"In contrast to the continuing low bank deposit rates available to investors, we continue to offer our shareholders a growing yield with a resilient net asset valuation," HICL chairman Graham Picken said in a statement.

The fund's board has declared an interim distribution of 3.2 pence per share, up 2.4 percent, with a scrip alternative. It said its goal was to achieve a distribution of 7 pence per share by the year to end-March 2013.

The infrastructure fund, which invests in public-private partnership projects such as schools and hospitals, said its investment adviser was negotiating further investments with a value in excess of 70 million pounds.

It said it would announce details of its capital increase, through a C share issue, later on Thursday.

(Reporting by Greg Roumeliotis; Editing by Joel Dimmock)