HONG KONG: HSBC bank on Tuesday said its first-quarter profits more than doubled, helped by a reversal in credit losses as well as its ongoing restructuring and pivot to Asia.
Adjusted profit before tax surged 109 percent to $6.4 billion from a year earlier although reported revenue slipped five percent to $13.0 billion in part because of low interest rates.
The results, which beat estimates, are a shot in the arm for the Asia-reliant lender after a tumultuous year that saw its fortunes take a hammering from the coronavirus and simmering geopolitical tensions.
“I am pleased with our revenue and cost performance, but particularly with our significantly lower expected credit losses,” Chief Executive Officer Noel Quinn said in a statement.
Quinn struck a cautiously optimistic note for the near future with hopes high that mass vaccinations may start to ease pressure on the global economy, even as infection numbers continue to soar.
Bright spots included a $400-million reversal in credit losses as well as its Europe and US regions returning to profit. In the UK, pre-tax profits were more than $1.0 billion for the quarter.
Britain’s vaccine roll-out “has really given us the confidence that the UK economy has the potential to rebound”, Quinn said in a call with reporters. Like all banking giants HSBC was battered by the coronavirus last year with a 30 percent plunge in 2020 profit.
Under Quinn, the bank has embarked on a dramatic restructuring, rolling out plans to cut its workforce by about 35,000 to drive down costs and to refocus on its most profitable areas — Asia and the Middle East.
HSBC makes 90 percent of its profit in Asia, with China and Hong Kong the major drivers of growth.
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