Published: Sun, May 05, 2019
Markets | By Otis Pena

HSBC's Q1 profit rises 31% on income hike, lower costs

HSBC's Q1 profit rises 31% on income hike, lower costs

At the parent bank, HSBC Holdings, global profit was US$4.9-billion in the first quarter, up 31 per cent from a year ago, and the bank earned 21 U.S. cents a share, up from 15 USA cents a year earlier.

Britain's biggest bank said pre-tax profit for the three months to the end of March increased 31% to $6.2bn as revenue rose 5% to $14.4bn.

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Adjusted for currency differences and one-off charges, pre-tax profit increased by 9.5 percent year-on-year to $6.4 billion on revenue which rose by 9 percent. "We are proactively managing costs and investment in line with this more uncertain outlook and will continue to do so", he added.

The bank makes three-quarters of its profits in Asia.

Overall, previous year saw strong growth for HSBC with net profit ballooning 30 percent to US$12.6 billion.

The bank saw a profitable past year, but it suffered a tough final quarter when it took a hit from uncertainty over Brexit and the long-running trade row between Washington and Beijing.

The banking division, which advises clients on finance and mergers, has lost senior dealmakers and slipped down the 2018 rankings in merger advisory and equity capital markets amid internal questions over its strategic direction.

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HSBC's stock traders did particularly badly, with revenues tumbling 34 per cent excluding a favourable one-off provision, the worst performance of an equities business in the quarter among major USA and European banks.

Revenue for the first quarter was expected to be $13.788 billion, little changed from the $13.71 billion that the bank reported a year ago, according to Refinitiv.

The lender reshuffled its global banking division on April 30 as former JPMorgan banker Greg Guyett put his stamp on the business, which has been under pressure in recent years.

Earlier this year, HSBC warned profits would be hit by a slowdown in China.

The bank said its "US turnaround" was progressing, but remained its "most challenging strategic priority".

In the March quarter, North America posted a pretax profit of $379 million compared to a loss of $596 million in the year-ago period, as the bank increased retail customer numbers and capitalised on its global network, it said.

So far this year HSBC is the sector laggard up just 3%, including today's 2% move, while Barclays (BARC) and Royal Bank of Scotland (RBS) are up 9% this year and Lloyds (LLOY) is up 21%.

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