HSBC Holdings Plc (HBC, HSBA.L) Tuesday reported a sharp increase in first-quarter profit, reflecting higher revenues as well as lower loan impairment charges and other credit risk provisions. The company saw revenue growth in its key areas, including residential mortgages and Commercial Banking.
Group Chief Executive Stuart Gulliver said, "While continuing uncertainty in the global economy has created a relatively muted environment for revenue growth, we have increased revenue in key areas including residential mortgages and Commercial Banking in both our home markets of Hong Kong and the UK, and in our Financing and Equity Capital Markets business."
In an interim management statement, the company said its profit before tax surged to $8.43 billion from $4.32 billion in the previous year. On an underlying basis, pre-tax profit was $7.59 billion, up from $5.65 billion a year earlier.
The latest-quarter results included adverse movements of $0.2 billion on the fair value of its own debt, compared to $2.6 billion last year, and gains of $1.1 billion from disposals and the reclassification of an associate, compared to $0.2 million in the prior year.
Profit attributable to shareholders of the parent company surged to $6.35 billion from $2.58 billion in the prior year. On a per share basis, earnings were $0.33, higher than $0.13 per share reported last year.
Loan impairment charges and other credit risk provisions declined to $1.17 billion from $2.37 billion in the prior year.
Revenue for the quarter grew to $18.42 billion from $16.20 billion a year earlier. Underlying revenue was $17.56 billion, up from $16.80 billion in the year-ago quarter.
Net interest income declined to $8.97 billion from $10.09 billion last year. Net fee income was $4.25 billion, compared to $4.31 billion reported last year. Meanwhile, net trading income climbed to $3.84 billion from $2.88 billion in the previous year.
Operating expenses were $9.35 billion, down from $10.35 billion last year.
Core tier 1 capital ratio as at March 31, 2013 was 12.7 percent, compared to 12.3 percent at the end of 2012.
The directors of HSBC Holdings have declared a first interim dividend of $0.10 per share in respect of the year ending December 31, 2013. The dividend will be payable on July 11, 2013, to holders of record on May 23 on the Hong Kong Overseas Branch Register and May 24, on the Principal Register in the United Kingdom or the Bermuda Overseas Branch Register.
HSBC USA Inc, a subsidiary of HSBC Holdings, reported first-quarter income from continuing operations before tax of $287 million, significantly up from $98 million in the year-ago quarter. However, net income declined to $183 million from $235 million in the prior year. Net interest income after provision for credit losses fell to $484 million from $587 million last year.
HSBC Finance reported a net income of $226 million, compared to a loss of $155 million last year. On an IFRS basis, however, the company reported loss before tax of $137 million compared with a loss before tax of $716 million last year. Net interest income for the period was $394 million, down from $408 million a year earlier.
In London, HSBC shares are currently trading at 733.6 pence, up 19.7 pence or 2.76 percent, on a volume of 19.01 million shares.
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