HSBC suffers steep fall in Q1 profits despite tough cost cuts
Europe's largest lender HSBC suffered a fall of 20 per cent in quarterly profits, despite implementing sweeping cost-cutting measures.
The UK-based lender announced that its profits slipped to £4 billion ($6.79 billion) in the first three months of 2014, down by a fifth on the corresponding three-month period of 2013. The bank's global banking & markets division suffered the most, with a decline of 20 per cent in profits to $2.87 billion.
Revenues slipped 8.3 per cent to $15.88 billion, outstripping a fall of 5.3 per cent in operating expenses that came in at $8.85 billion in the three-month period under review.
While many analysts concluded that the bank's sweeping cost-cutting measures helped little, Chief executive Stuart Gulliver said, "In the first quarter we maintained control of costs and further demonstrated our capital resilience"
By contrast, the lender's retail banking business and wealth management profits soared 9.3 per cent to settle at $1.71 billion. Commercial banking reported even better improvement, with its profits increasing 10.7 per cent to settle at $2.42 billion.
Its private banking division swung back to profit. It reported a profit of $201 million in the first quarter of this year, as against a loss of $125 million in the corresponding quarter of last year.
In the after-hours trading, stock in HSBC shed 7½p to close at 596½p a share.