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| HSBC quarterly profit falls 14% over uncertain markets | HSBC quarterly profit falls 14% over uncertain markets |
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| HSBC reported a bigger first-quarter profit than analysts forecast, weathering turbulence in global markets, as Chief Executive Officer Stuart Gulliver pared back costs. | HSBC reported a bigger first-quarter profit than analysts forecast, weathering turbulence in global markets, as Chief Executive Officer Stuart Gulliver pared back costs. |
| Pretax profit fell to $6.1 billion from $7.1 billion a year earlier, the London-based bank said in a Hong Kong exchange filing on Tuesday. That compared with the $4.3 billion average estimate of 14 analysts compiled by the lender.# | Pretax profit fell to $6.1 billion from $7.1 billion a year earlier, the London-based bank said in a Hong Kong exchange filing on Tuesday. That compared with the $4.3 billion average estimate of 14 analysts compiled by the lender.# |
| HSBC’s shares reversed earlier losses after it reported that operating expenses fell 6.6 per cent from a year earlier and Gulliver said that HSBC was confident of hitting its cost targets by the end of 2017. He cited an “increasing impact” from efforts to rein in spending after the lender previously reported an unexpected fourth-quarter loss amid China’s slowdown. | HSBC’s shares reversed earlier losses after it reported that operating expenses fell 6.6 per cent from a year earlier and Gulliver said that HSBC was confident of hitting its cost targets by the end of 2017. He cited an “increasing impact” from efforts to rein in spending after the lender previously reported an unexpected fourth-quarter loss amid China’s slowdown. |
| The bank’s efforts on costs were “better than expectations and will continue to be a management focus for this year, especially with the pressure on the top line,” Chirantan Barua, an analyst with Sanford C. Bernstein & Co. said in a note. | The bank’s efforts on costs were “better than expectations and will continue to be a management focus for this year, especially with the pressure on the top line,” Chirantan Barua, an analyst with Sanford C. Bernstein & Co. said in a note. |
| HSBC shares rose 1.5 per cent as of 1:28 pm in Hong Kong. | HSBC shares rose 1.5 per cent as of 1:28 pm in Hong Kong. |
| Gulliver, 57, and Chairman Douglas Flint, 60, the longest-serving duo at the helm of a European bank, are nearing the end of their terms: Flint is stepping down next year, and his replacement will start the search for a new CEO. | Gulliver, 57, and Chairman Douglas Flint, 60, the longest-serving duo at the helm of a European bank, are nearing the end of their terms: Flint is stepping down next year, and his replacement will start the search for a new CEO. |
| Revenue decreased 5.8 per cent to $15 billion, according to the filing. In Asia, the decline was 11 per cent to $5.8 billion. | Revenue decreased 5.8 per cent to $15 billion, according to the filing. In Asia, the decline was 11 per cent to $5.8 billion. |
| “Market uncertainty led to extreme levels of volatility in January and February, which affected our ability to generate revenue in our markets and wealth management businesses,” Gulliver said. He described the lender’s performance as “resilient in tough market conditions that affected the entire banking sector.” | “Market uncertainty led to extreme levels of volatility in January and February, which affected our ability to generate revenue in our markets and wealth management businesses,” Gulliver said. He described the lender’s performance as “resilient in tough market conditions that affected the entire banking sector.” |
| Charges for bad loans doubled to $1.16 billion, compared with an estimate of $999 million, as credit soured in oil, gas, metals and mining. | Charges for bad loans doubled to $1.16 billion, compared with an estimate of $999 million, as credit soured in oil, gas, metals and mining. |
| Since 2011, Gulliver has slashed more than 87,000 jobs, exited at least 80 businesses and reduced the bank’s sprawling footprint to 71 countries and territories from 88. Alongside most other European banks, the CEO has been struggling to boost profitability in the face of record-low interest rates, misconduct fines and rising regulatory costs. | Since 2011, Gulliver has slashed more than 87,000 jobs, exited at least 80 businesses and reduced the bank’s sprawling footprint to 71 countries and territories from 88. Alongside most other European banks, the CEO has been struggling to boost profitability in the face of record-low interest rates, misconduct fines and rising regulatory costs. |
| Risk-weighted assets rose during the quarter because of increased corporate lending, the bank said. HSBC plans a reduction of about $290 billion of total risk-weighted assets while redeploying $100 billion to $150 billion of those assets in Asia. The bank is targeting a return on equity of more than 10 per cent by 2017. | Risk-weighted assets rose during the quarter because of increased corporate lending, the bank said. HSBC plans a reduction of about $290 billion of total risk-weighted assets while redeploying $100 billion to $150 billion of those assets in Asia. The bank is targeting a return on equity of more than 10 per cent by 2017. |
| © 2016 Bloomberg L.P | © 2016 Bloomberg L.P |
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