5th Aug 2019 05:45
LONDON (Alliance News) - HSBC Holdings PLC on Monday said Chief Executive Officer John Flint will be stepping down from his role as the lender reported "strong momentum" in the first half.
Europe's largest bank said Flint will be replaced by Global Commercial Banking CEO Noel Quinn on an interim basis.
Turning to the lender's first half results, HSBC saw a 16% jump in pretax profit to USD12.41 billion from USD10.71 billion the year before.
"This increase reflected a rise in revenue of USD2.1 billion, primarily in Retail Banking & Wealth Management from balance sheet growth and wider margins in Retail Banking, and in Commercial Banking from growth in all our major products," HSBC explained.
The lender did note, however, its investment bank Global Banking & Markets saw revenue slip in the half. HSBC said the unit suffered from "lower market activity due to ongoing economic uncertainty".
Driving profit and revenue was the lender's Asia business - which saw profit grow 4.3% to USD9.78 billion - on a "strong performance in Hong Kong, the Pearl River Delta and Singapore". HSBC said its loan book in Asia grew 5% in the half.
HSBC added that it made a USD828 million gain in the half on the merger of the Saudi British Bank with Alawwal bank in Saudi Arabia.
For the six months to June 30, HSBC's revenue grew 7.6% to USD29.37 billion from USD27.29 billion the year before.
The Asia-focused lender's net interest income was slightly higher year on year at USD15.24 billion.
HSBC's net interest margin in the first half was 1.61%, down from 1.66% at the end of the first half in 2018.
For the first half, return on average tangible equity stood at 11.2%, up from 9.7% the year prior.
For the six months ended June, the jaws ratio was at 4.5%. The jaws ratio - a key financial performance indicator - is the difference between the percentage growth in income and the percentage growth in expenses.
Group operating expenses decreased 2.3% to USD17.55 billion from USD17.15 billion the year before.
The CET1 ratio for HSBC ended the period at 14.3%, an increase from 14.0% at December 31. The lender reported a 2.4% rise in risk-weighted assets to USD885.97 billion.
HSBC's loans & advances to customers increased in the half to USD1.02 trillion from USD973.44 billion the year before.
The bank's customer accounts at June 30 was broadly flat at USD1.38 trillion.
HSBC declared an interim dividend of 0.31 US cents, unchanged from the year before.
Looking ahead, HSBC warned its US business will be unable to achieve its 6% return on tangible equity target in 2020, "given the prevailing outlook for interest rates and revenue headwinds in Global Banking &
Markets and Retail Banking & Wealth Management," the lender explained.
HSBC added: "Interest rates in the US dollar bloc are now expected to fall rather than rise, and geopolitical issues could impact a significant number of our major markets. In the near term, the nature and impact of the UK's departure from the EU remain highly uncertain."
HSBC is still targeting a group return on tangible equity target of above 11% in 2020.
"We will not take short-term decisions that could jeopardise the long-term health of the business," HSBC added.
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