3rd May 2016 04:50
LONDON (Alliance News) - HSBC Holdings PLC, the biggest bank by market value in the FTSE 100, on Tuesday said its first-quarter pretax profit fell by 14%, hit amid tough conditions in the banking sector.
Pretax profit fell to USD6.11 billion in the three months ended March 31, HSBC said in a statement, from USD7.06 billion the corresponding quarter a year earlier.
A 3.8% reduction in adjusted revenue to USD13.91 billion was partly offset as adjusted operating expenses fell by 1.0% to USD7.87 billion.
Loan impairment charges, adjusted for currency translation, jumped to USD1.16 billion from USD469 million, with HSBC citing "higher specific charges across a number of countries". There were additional charges related to the oil and gas, and metals and mining sectors, according to the bank, which said credit quality remains robust.
"Our first quarter performance was resilient in tough market conditions that affected the entire banking sector," Chief Executive Stuart Gulliver said in a statement.
Amid uncertainty due to fears about China's economic slowdown, global growth and low oil prices, "extreme" market volatility in January and February hit HSBC's ability to generate revenue in its markets and wealth management business.
Gulliver said HSBC's diversification helped to "cushion" the effects. "Commercial Banking continued its momentum in spite of the slow-down in global trade, and we increased market share across our strategic trade corridors," he said.
"We also grew revenue elsewhere in Retail Banking and Wealth Management, particularly from current and savings accounts in Hong Kong and the UK, and personal lending in Asia and Mexico," Gulliver said.
HSBC maintained its first-quarter dividend at USD0.10. Its common equity tier one ratio, a measure of financial strength and the ability to pay dividends, was unchanged when compared to the end of 2015, at 11.9%.
By Samuel Agini; [email protected]; @samuelagini
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