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HSBC sees pre-tax profits double

Hannah Smith
Written By:
Hannah Smith

HSBC has reported profits doubled in the first three months of the year compared to the same period in 2012 as the lender nears the end of a three-year restructuring programme.

Pre-tax profit came in at $8.4bn, a 95% increase on the figure for quarter one (Q1) 2012. This was slightly higher than analysts’ expectations, and largely due to cost saving measures and a drop in toxic debts.

Loan impairments cost the bank $1.2bn in Q1, down from $2.4bn the previous year.

HSBC also reported revenues of $18.4bn, up from $16.2bn for Q1 2012.

The bank’s capital position was slightly stronger during the reporting period, with a core tier one capital ratio of 12.7%, compared to 12.3% as at 31 December 2012.

Group chief executive Stuart Gulliver said the bank has made progress in implementing the strategy it set out in May 2011 to restructure the business. The restructure has seen HSBC sell off 52 businesses since 2011 as it looks to reduce risk, and has also resulted in the loss of 38,000 jobs.

“While continuing uncertainty in the global economy has created a relatively muted environment for revenue growth, we have increased revenue in key areas…

“Loan impairment charges were lower in every region, notably in North America. Our continued focus on cost management contributed to an improvement in our underlying cost efficiency ratio,” he said.

“We have achieved further progress on the journey we started in 2011 to make HSBC easier to manage and control. The implementation of global standards will help ensure that we meet the commitments we made to the US and UK authorities as part of the settlement agreements reached at the end of last year.

“We have strengthened our capital position and remain one of the best-capitalised banks in the world, allowing us both to invest in organic growth and grow dividends. Our strategic direction remains unchanged. Later this month we will update investors on the next phase of its implementation.”

Shares in the bank were 2.54% higher at 732p in morning trading.