Banking giant HSBC Holdings PLC yesterday said that pretax profit jumped 30.7 percent to US$6.2 billion in the first three months of the year, describing the results as “encouraging,” despite an uncertain global outlook.
The London-based behemoth also said that it had reduced reported operating expenses by 12 percent as group chief executive officer John Flint embarks on a planned overhaul aimed at growing the bank while keeping a lid on costs.
Reported profit after tax jumped 31.4 percent to US$4.9 billion in the period, thanks to strong revenue growth in retail banking, wealth management and commercial business, the lender said.
“We have made a good start to 2019,” Flint, who took the helm in February last year, said in a filing with Hong Kong’s stock exchange announcing the results.
“We remain alert to risks in the global economy,” he said. “We are proactively managing costs and investment in line with this more uncertain outlook and will continue to do so.”
Flint’s progress in bringing costs more under control is likely to be welcomed by investors, especially given that revenue gains outpaced cost increases in the first three months of the year.
The Asia-centric bank had failed to live up to its pledge to produce positive jaws last year.
Kingston Securities Ltd (金利豐證券) analyst Dickie Wong (黃德几) said that Flint’s arrival had injected some fresh energy into the bank and a tighter leash around costs.
“A new person, a new style, brings in a new atmosphere,” Wong said, using a Chinese idiom.
Adjusted operating expenses rose 3.2 percent in the quarter, compared with a 5.6 percent increase in the same period last year, HSBC said.
The bank saw a profitable last year, but it suffered a tough final quarter when it took a hit from uncertainty over Brexit and the long-running trade row between Washington and Beijing.
Overall, last year saw strong growth for HSBC with net profit ballooning 30 percent to US$12.6 billion.
However, the yearly growth figures were dampened by a tough final quarter when the markets — especially those in Hong Kong and China — went into meltdown over global trade fears.
It is “time for the organization to get back into growth mode,” Flint said in recent video produced by HSBC detailing his first year in office.
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