Pretax profit declined to $6.79 billion from $8.43 billion in the same period a year earlier, London-based HSBC said in a statement today. That met the $6.77 billion average estimate of analyst by Bloomberg. Operating income before provisions slipped to $15.9 billion from $18.4 billion.
The Bank, which derives the bulk of its profit from Asia, has closed or sold more than 60 businesses since 2011 to focus on its most profitable markets and is also seeking to cut costs. One-time gains from asset sales in 2013 weren’t repeated in the quarter, while operating costs dropped 2 percent to $8.8 billion, HSBC said today.
‘Muted’ OutlookThe shares fell 0.8 percent to 599 pence at 1:12 p.m. in London trading, bringing their decline for the year to 9.6 percent, the second-worst performance among U.K. bank stocks after Barclays.
“We continued to experience muted customer activity in April,” HSBC said in the statement.
HSBC’s return on equity, a measure of profitability, declined to 11.7 percent from 14.9 percent a year earlier, the bank said. That compares with the company’s goal of 12 percent to 15 percent. Costs as a proportion of revenue rose to 55.7 percent from 50.8 percent, in line with Chief Executive Officer Stuart Gulliver’s “mid-50s” target.
Pretax profit in Asia fell to $3.76 billion from $5.51 billion, while earnings in Europe were little changed at about $1.8 billion.
The bank booked a gain of $1.09 billion in the first quarter of 2013 after it changed its treatment of a stake in Industrial Bank Co., according to HSBC. HSBC also sold its stake in Shenzhen, China-based Ping An Insurance Co. for about $9.4 billion in February last year.