Reports

HSBC's Private Bank Logs Mixed Results; Group Profit Rises By 31 Per Cent

Tom Burroughes, Group Editor, 3 May 2019

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The private banking arm reported a profit rise in the quarter but a drop from a year earlier.

Hong Kong/UK-listed HSBC today said that its reported post-tax income for the first quarter rose by 31 per cent to $4.9 billion while reported revenue and adjusted revenues rose by 5 per cent and 9 per cent, respectively, buoyed by higher markets and gains from disposals.

Before tax, profits stood at $6.213 billion, up by 30.7 per cent, the bank said in a statement. Results beat analysts' forecasts, according to Bloomberg.

“HSBC has remained a significant dividend payer (5.8% yield) and we continue to suggest the shares as a ‘buy’ for an income geared portfolio," Graham Spooner, investment research analyst at The Share Centre, said. 

Shares in the bank were up about 0.63 per cent around 12:30 London time today.

The private banking pre-tax income rose to $98 million in Q1 from $60 million from the previous quarter, but fell from $111 million a year earlier, the bank said. The year-on-year drop was mainly caused by the “impact of our repositioning actions in the US, partly offset by lower operating expenses”.

Adjusted revenue in private banking stood at $450 million, down by 4 per cent, mainly caused by the bank’s repositioning actions, and lower Swiss revenues, which was partly offset by revenue growth in Asia. 

During Q1, the private bank attracted $10 billion of net new money inflows, mainly in Europe and Asia, HSBC said. 

Across the entire HSBC group, all regions with the exception of Europe posted a profit in Q1.

The bank said its Common equity tier 1 ratio – a common measure of a bank’s capital structure – rose 30 basis points from 31 December 2018 to 14.3 per cent.

“These are an encouraging set of results, particularly in the context of heightened economic uncertainty globally. We remain focused on executing the strategy we outlined last June, while also being alert to risks in the global economy,” John Flint, group chief executive, said.

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