HSBC Holdings plc group chairman Stephen Green (left) and Michael Smith, president and CEO for HSBC Asia Pacific, announcing the results in Hong Kong on Monday. (AFP)

London, July 31 (Reuters): Europe’s biggest bank HSBC Holdings beat analysts’ median forecast with an 18 per cent rise in first-half profit on Monday, helped by a strong performance at its investment bank and in emerging markets.

The London-headquartered bank said it made a pretax profit of $12.52 billion in the six months to the end of June, up from $10.64 billion a year ago and above a median forecast of $11.52 billion from 11 analysts.

HSBC, whose operations span 77 countries, said pretax profit at its investment banking business (CIBM) jumped 37 per cent, with a gap of 12 per cent between revenue growth and cost growth.

“CIBM was probably the stand-out performer. The investment phase that came to a peak last year moved into the execution phase this year, which had a very significant impact on profits,” Douglas Flint, finance director, told reporters on a conference call.

CIBM’s revenue jumped by a quarter, outpacing a 13 per cent rise in costs, which were mainly due to higher bonuses.

HSBC has previously said cost growth in the unit was expected to slow after four years of heavy investment.

HSBC’s London-listed shares were up 0.6 per cent at 979.5 pence, valuing the bank at about '112 billion ($208.3 billion), making it the world’s third-biggest bank. The DJ Stoxx European banking index was down about 0.3 per cent.