LONDON: HSBC beat expectations with an underlying first-quarter profit of $6.8 billion as Europe's biggest bank saw a rebound in investment banking, growth in Asia and a fall in US bad debts.
HSBC said yesterday it was making good progress with its strategic revamp, including cost savings, and had shed 14,000 jobs since last year as part of chief executive Stuart Gulliver's drive to boost profitability.
"We are pleased that the measures that are under our control, we are getting some serious traction on," Gulliver said.
He pointed to Hong Kong, the rest of the Asia-Pacific region and Latin America as showing the benefit, with revenues up 16 per cent, 18pc and 7pc on the year respectively, and highlighted strong performances in commercial banking and investment banking, called Global Banking and Markets (GBM).
GBM's rates business was boosted by the European Central Bank's massive injection of liquidity in December and February, although that boost has faded in the last two months.
Reflecting concerns about the euro zone backdrop, HSBC is hoarding more of its excess liquidity in Europe at central banks. It now has $153bn at central banks, up $23bn since December and up by $85bn in the last nine months.
Other banks, including Santander and BNP Paribas, are also parking excess cash with central banks, preferring that to the risk a counterparty could hit trouble.
HSBC, which makes over three quarters of its profits outside Europe and North America, has bounced back more strongly from the 2008 financial crisis than many competitors, helped by its presence in faster-growing emerging markets.
However, it is facing the same regulatory pressure as rivals to reduce risks, as well as the euro zone's uncertain political backdrop, which are combining to create "significant headwinds" in developed economies, the bank said.