HSBC First-Quarter Profit Fell 20% - Activity 'Muted' In April
HSBC, which is Europe's biggest bank but makes most of its profits in Asia, said it had continued to experience "muted customer activity" in April.
Most investment banks have seen income drop in the first quarter after a grim start to the year for bond and interest rate trading, and HSBC said profits at its global banking and markets arm fell by a fifth from a year ago. But it said it won market share in several areas, including equity and debt capital markets and advisory.
Chief Executive Stuart Gulliver has said he is in the second phase of a turnaround aimed at making his bank less complex, more nimble and efficient and able to deliver better returns and dividends for shareholders.
HSBC's cost efficiency ratio was 55.7 percent in the first quarter, close to its target of mid-50s, but its return on equity slipped to 11.7 percent, below its 12-15 percent target.
HSBC said it cut operating costs by 2 percent to $8.8 billion in the first quarter, but excluding one-off items expenses rose 2 percent.
The bank has axed more than 40,000 jobs and sold or closed 60 businesses over the past three years to cut costs, but said it added 1,100 jobs in the first quarter, mainly due to beefing up compliance and adding staff where it sees growth potential.
HSBC reported a pretax profit of $6.8 billion, down from $8.4 billion a year ago but just above the average forecast of $6.6 billion from 13 analysts polled by the company.
Underlying profits, stripping out gains from disposals and movement in the value of its own debt, was $6.6 billion, down 13 percent from a year ago.
(Reporting by Steve Slater; Editing by Matt Scuffham)