HSBC Q1 pre-tax net nearly doubles to $8.4 bn
Mumbai: Largest European bank HSBC Group on Tuesday said its March quarter pre-tax profit has nearly doubled to USD 8.4 billion compared to the first quarter of 2012.
The profits were boosted by the USD 1.1 billion proceeds from sale and reclassification of the bank's Chinese insurance arm Ping An and a massive boost from trading income coupled with the savings from cost-cutting.
Excluding this one-time gain, Q1 pre-tax net rose 34 percent to USD 7.6 billion over the year-ago period, aided by a revenue of USD 800 million and lower loan impairment charges of USD 900 million, with a notable improvement in US consumer and mortgage lending portfolio, a bank statement said.
Underlying revenue included a net gain of USD 600 million on completion of the sale of the bank's remaining shareholding in Ping An Insurance Company of China and a USD 500 million favourable debit valuation adjustment on derivative contracts, the London-based lender said.
"The remaining revenue was broadly unchanged," Group Chief Executive Stuart Gulliver said, adding, "We achieved revenue growth in key areas, including residential mortgages and commercial banking, in both our home markets of Hong Kong and Britain, and financing and equity capital markets."
The bank said during the quarter, it saved an additional USD 400 million, taking cost efficiency ratio to 53.2 percent in from 56.9 percent a year ago.
HSBC has been aggressively cutting cost in the wake of financial crisis, shedding 38,000 jobs and closing or selling more than 50 businesses.
Its Asia business, excluding those from Hong Kong, contributed to USD 3.35 billion, up from USD 2.02 billion a year ago, while Hong Kong business grew to USD 2.15 billion from USD 1.89 billion, making Asia its largest market.
Revenue for the region declined to USD 1.04 billion from USD 1.13 billion a year ago. Its Hong Kong revenue however inched up a bit to USD 898 million from USD 788 million. By revenue, Europe is the largest market for the bank with USD 2.52 billion, up from USD 2.41 billion a year ago.
The financial giant, whose domestic subsidiary is the oldest and the second largest bank by balance-sheet in the country, did not offer India numbers.
The bank's net operating income before loan impairment charges and other credit provisions rose to USD 18.4 billion in the reporting quarter, which is 14 percent higher than in first quarter of 2012, Gulliver said.