HSBC Q1 profit falls 14 per cent as market remains uncertain
Europe’s biggest bank, HSBC, said on Tuesday that its first-quarter profit fell 14 per cent, as tough market conditions knocked down the lender’s income from investment banking and wealth management businesses.
The bank reported a profit of $6.1 billion for the three months that ended on March 31, compared with a profit of $7.1bn in the corresponding period a year earlier.
The results, however, beat the expectations of analysts polled by HSBC, who forecast a pretax profit of $4.3bn, according to Reuters.
During the period under review, the lender’s adjusted profit before tax was $5.4 bn, down by 18 per cent from the profit during the same period in 2015.
The banking giant’s quarterly adjusted revenue fell by four per cent to reach $13.9bn, which the lender attributed to “challenging market conditions”.
“Our first-quarter performance was resilient in tough market conditions that affected the entire banking sector,” HSBC Group Chief Executive Stuart T Gulliver said in a statement.
“Profits were down against the very strong first quarter of 2015, but we increased market share in many of the product areas that are critical to our strategy,” he added.
“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. However, our diversified, universal-banking business model helped to cushion the impact through growth in other parts of the bank. Commercial Banking continued its momentum in spite of the slow-down in global trade, and we increased market share across our strategic trade corridors,” Gulliver remarked.
HSBC had announced in June last year that it was culling as many as 50,000 of its nearly 250,000 jobs and that it would put a freeze on pay and hiring as part of its plans to revamp its businesses.
In the UAE, the bank announced in November last year that it would cut 150 jobs as it was reviewing its overall headcount requirements.