Investment bank, cost cuts help HSBC top forecasts
By Steve Slater and Sarah White
LONDON (Reuters) - HSBC beat expectations with an underlying first-quarter profit of $6.8 billion as Europe's biggest bank saw a rebound in investment banking, growth in Asia and a fall in U.S. bad debts.
HSBC said on Tuesday it was making good progress on its strategic revamp, including cost savings, and had shed 14,000 jobs since last year as part of chief executive Stuart Gulliver's drive to boost profitability.
"We are pleased that the measures that are under our control, we are getting some serious traction on," Gulliver told reporters.
He pointed to Hong Kong, the rest of the Asia-Pacific region and Latin America as showing the benefit, with revenues up 16 percent, 18 percent and 7 percent on the year respectively, and highlighted strong performances by the group's commercial bank and investment bank operations, called Global Banking and Markets (GBM).
HSBC, which makes over three quarters of its profits outside Europe and north America, has bounced back more strongly from the 2008 financial crisis than many competitors, helped by its presence in faster-growing emerging markets.
However, it is facing the same regulatory pressure as rivals to reduce risks, as well as volatile financial markets.
Regulatory and political uncertainties continue to create "significant headwinds" in developed economies, the bank said. In contrast, China's economy should have a soft landing and emerging market economies should show growth of more than 5 percent this year, it predicted.
Gulliver is quitting areas where HSBC lacks scale and increasing its focus on Asia. He will provide a more detailed update on strategy at an investor day on May 17. Continued...