4th May 2018 05:38
LONDON (Alliance News) - HSBC Holdings PLC on Friday said increased operating expenses have caused a dip in first quarter profit, though it did announce a USD2.00 billion share buyback.
The FTSE 100-listed bank posted reported pretax profit of USD4.76 billion for the three months to March, down 4% year-on-year from USD4.96 billion. On an adjusted basis, the figure declined 3% to USD6.03 billion.
HSBC's revenue rose, however, to USD13.71 billion from USD12.99 billion the prior year and from USD12.30 billion in the last quarter of 2017.
HSBC said revenue growth was driven partly by higher deposit margins and balance growth in Retail Banking & Wealth Management as well as global liquidity and cash management growth in its Commercial Banking business, particularly in Asia.
The company said a 13% increase in reported operating expenses to USD9.38 billion, reflecting business investment and spending on digital capabilities, "more than offset" higher revenue.
Adjusted pretax profit increased in all global businesses save for Global Banking & Markets and Corporate Centre, the former suffering from lower client activity in its fixed income business, HSBC said.
HSBC said it has a strong capital base, with its common equity tier 1 ratio standing at 14.5% at the end of March, flat from the end of 2017.
It is paying a first quarter interim dividend of USD0.10 per share, as part of its new dividend policy outlined at the time of 2017 results which will see HSBC pay three equal quarterly dividends followed by a variable fourth.
The bank is also planning a share buyback of up to USD2.00 billion, which will start "shortly". It expects this is likely to be the only buyback this year.
Chief Executive John Flint said: "Our global businesses performed well in the first quarter, maintaining momentum from the end of 2017. We continue to benefit from interest rate rises and economic growth, particularly in Asia.
"Our primary focus is to grow the businesses safely, and we have increased investment to deliver that aim."
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