HSBC, the London-based banking giant, announced that its pre-tax profit for the first six months of this year reached $21.7 billion (£16.9 billion), more than doubling compared to $9.2 billion

the previous year. The significant increase in profit was attributed to rising interest rates worldwide.

The bank also received a $1.5 billion provisional gain from its acquisition of Silicon Valley Bank's British business (SVB UK), which contributed to the boosted figures.

HSBC's global businesses performed well, driven by strong net interest income and effective cost control, according to HSBC Chief Executive Noel Quinn. However, despite the remarkable profits, the bank cautioned about the uncertain economic outlook.

HSBC, whose revenue primarily comes from Asia, warned that UK customers might face additional pressure due to a combination of high inflation and rising interest rates, putting households under financial strain. With more mortgage customers expected to come off fixed-term deals in the next six months and further rate hikes anticipated, the bank predicts tougher times ahead for its customers.

The bank's positive financial performance aligns with central banks worldwide raising interest rates as a measure to tackle inflation. The Bank of England, in particular, has increased its base rate 13 times in a row and is expected to raise it again in the upcoming meeting.

In light of the increasing interest rates, UK financial institutions have been urged to pass on the rate hikes to savers. The UK's financial watchdog, the Financial Conduct Authority (FCA), has warned banks against offering unjustifiably low savings rates to customers, stating that they will face robust action if they fail to comply.

HSBC's profits were additionally buoyed by the purchase of SVB UK earlier this year, a deal that received a $1.5 billion boost, led by the government and the Bank of England. Photo by mattbuck (category), Wikimedia commons.