HSBC to monitor costs after first-quarter profit rise to meet market expectations
HSBC is set to closely monitor its costs over the remainder of the year after it comfortably exceeded market expectations during the first quarter of 2019.
The banking giant reported a 31 per cent jump in pre-tax profit, lifting figures to £4.8 billion ($6.2 billion) compared with the $4.8 billion recorded over the same period in 2018.
This comfortably saw off the $5.58 billion average of analysts' estimates previously compiled by HSBC, coinciding with strong growth in its retail banking, commercial banking, and wealth management branches, alongside strong growth in Asia, where the bank records three quarters of its profits.
In London, the bank's shares were up by 2.7 per cent in trading over Friday morning.
The US branch of HSBC brought in a profit of $379 million, compared with a pre-tax loss of $596 million in the first quarter of last year.
Despite its progress, the bank conceded that business stateside remained its "most challenging strategic priority”.
HSBC chief-executive, John Flint, said the results were “encouraging” and that the group was “proactively managing” its costs against the backdrop of a more "uncertain global economy".
The earnings release revealed operating expenses were down 12 per cent during the first quarter, with earnings per share up 40 per cent to 21 cent.
Meanwhile, credit losses and other credit impairment charges increased, particularly in UK commercial banking.
HSBC’s Chief financial Officer, Ewan Stevenson, hinted that a further crackdown on costs within the group could follow later in the year, while the range of broad economic outcomes of Brexit had forced the hand of the group into "keep a closer eye" on its UK credit business.
However, after the group took the decision of uprooting several of its European subsidiary businesses from the UK and moving across to France, Stevenson admitted that the Brexit scenario for HSBC should now be "far less complex".