HSBC Holdings releases 1Q 2017 results
Strategic execution
- Strong momentum in Asia with customer advances in the Pearl River Delta up 17% on 1Q16, new insurance sales up 13% and growth in assets under management of 15%.
- Achieved annualised run-rate savings of $4.3bn since inception, while continuing to invest in growth, and regulatory programmes and compliance. Incremental $0.4bn savings in 1Q17.
- Adjusted profit before tax growth in all three NAFTA countries. Lower LICs in the US and Canada; revenue growth in Mexico.
- Exceeded our RWA reduction target (FX rebased).
- Completed our $1.0bn share buy-back in April.
Stuart Gulliver, Group Chief Executive, said:
“This is a good set of results. The increase in adjusted profit was driven by strong performances in three of our four global businesses. Global Banking and Markets had a great quarter; Commercial Banking delivered higher revenue from our liquidity and cash management activities; and Retail Banking and Wealth Management was supported by rising interest rates and renewed customer investment appetite.
“In addition, we completed a $1bn buy-back, and made progress on our cost-saving programmes, giving us further confidence in our ability to hit the higher cost-saving target that we announced at our annual results.”
Financial performance
- Reported profit before tax of $5.0bn down $1.1bn or 19%, primarily due to adverse movements in significant items including fair value movements on our own debt from changes in our own credit spread in 1Q16; adjusted profit before tax of $5.9bn, up $0.6bn or 12% compared with 1Q16, reflecting lower LICs and higher revenue.
- Reported revenue of $13.0bn was 13% lower primarily due currency translation differences and the absence of fair value movements on our own debt and revenue from the operations in Brazil that we sold, which were the key elements of the adverse movement in significant items; adjusted revenue of $12.8bn, up $0.3bn or 2%, mainly in RBWM from life insurance manufacturing and growth in current accounts, savings and deposits, and in GB&M from Rates and Credit.
- Reported operating expenses of $8.3bn were $0.1bn or 1% higher; adjusted operating expenses of $7.2bn were $0.2bn or 3% higher, mainly due to a credit in the prior year relating to the 2015 UK bank levy. Excluding this, inflation and continued investment in our regulatory and growth programmes were partly offset by the impact of our cost-saving initiatives.
- Adjusted jaws was negative 0.6%.
- Compared with 4Q16, reported profit before tax was up $8.4bn; adjusted profit before tax was up $3.3bn.
- Strong capital base with a common equity tier 1 (‘CET1’) ratio of 14.3% and a leverage ratio of 5.5%.
Re-disseminated by The Asian Banker