(The Times Online) HSBC and Barclays suggest the ‘biggest jolt has passed’

HSBC and Barclays, Britain’s biggest banks, reported significant improvements in underlying profits yesterday and gave fresh evidence that the explosion in defaults by business and personal borrowers is beginning to ease.

HSBC said that underlying profits for the third quarter were significantly ahead of last year and that the worst of the crisis was probably over.

Michael Geoghegan, the chief executive, said: “I believe that the biggest jolt has now passed. But it is too early to claim victory, especially while unemployment is still rising in the West.”

HSBC revealed that bad debts in its US consumer finance division, which was the problem business at the heart of its troubles at the start of the crisis, fell for the first time since the start of 2006, in tentative evidence that the credit cycle was starting to improve.

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