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HSBC pre-tax profit up 4.58% at $10.7 bn in first half
HONG KONG, Aug 6, 2018 (BSS/AFP) – Banking giant HSBC said on Monday that
pre-tax profit rose 4.58 percent to $10.7 billion in the first six months of
the year and voiced “cautious optimism” despite the China-US trade row.
After wide-ranging cutbacks that saw 50,000 jobs axed in an overhaul
announced in 2015, the bank said it was now hiring again as it seeks new
growth areas.
“We are investing to win new customers, increase our market share, and lay
the foundations for consistent growth in profits and returns,” said CEO John
Flint.
He added that investments in the first half of the year included “hiring
more frontline staff in our strongest businesses and expanding our digital
capabilities in core markets”, saying that the aim was to improve customer
service.
The results met analysts’ expectations as they predicted the bank would
turn around its bottom line.
Revenues were also up four percent at $27.3 billion.
However, adjusted profit before tax of $12.1bn was down two percent and
revenues were tempered by a rise of seven percent in operating expenses to
$17.5 billion, which the bank said reflected investments in digital
capabilities.
The London-based firm is enjoying a change in fortunes after a tough few
years.
In January, it agreed to pay more than $100 million to US authorities
after admitting to defrauding clients during multi-billion-dollar foreign
exchange transactions.
And in December, US authorities lifted the threat of prosecution against
HSBC, five years after it admitted to widespread money laundering and
sanctions violations.
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In a landmark case, the bank agreed to pay $1.9 billion in fines in 2012
after admitting it knowingly moved hundreds of millions of dollars for
Mexican drug cartels and illegally served clients in Iran, Myanmar, Libya,
Sudan and Cuba in violation of a US prohibition.
Under the terms of the settlement, federal prosecutors agreed to drop all
charges after five years if the bank paid the fine, took remedial action and
avoided committing new violations.
Flint said in June that he plans to invest $15-17 billion primarily in
growth and technology projects, with a particular focus on accelerating
growth in Asia.
He was promoted to the top job after serving as HSBC’s head of retail
banking and wealth management.
After some strong profitable years under Stuart Gulliver before his
retirement, HSBC earnings plunged in 2016 on huge writedowns and
restructuring charges.
However, they rebounded strongly last year, in part thanks to a strong
Asian performance.
Prior to his departure, Gulliver said the bank would likely switch 1,000
jobs to Paris from London owing to Britain’s departure from the European
Union due next year.
HSBC, founded in Hong Kong and Shanghai in 1865, sees its focus firmly in
Asia, although it has been based in Britain since 1992.
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