HSBC reports surprise pre-tax profit fall
HSBC saw pre-tax profits fall 4% in the first three months of 2018, as higher costs more than eroded increased revenue.
Europe's biggest bank reported making $4.8bn (£3.5bn) compared with the $5bn posted in the the same period a year earlier - missing analysts' estimates. But shareholders will be cheered by plans for a $2bn share buyback. The results are the first announced since John Flint took over as chief executive from Stuart Gulliver. Bank overhaul Banks are generally reaping the rewards from improvement in the global economy, as central banks around the world lift borrowing costs after a decade of low rates. "We continue to benefit from interest rate rises and economic growth, particularly in Asia," Mr Flint said. "Our primary focus is to grow the businesses safely, and we have increased investment to deliver that aim." The bank said it expected the planned share repurchase programme to be the only one it offered in 2018, "in light of the growth opportunities that we currently see". HSBC is undergoing a wide-ranging overhaul which has seen it lay off tens of thousands of staff in the past couple of years. And its pivot to Asia in recent years has been paying off, with wealth management, commercial and retail banking becoming key drivers of growth. The lender, which has its regional headquarters in Hong Kong, has also beefed up its presence in China's heavily populated Pearl River Delta area, lending to firms in the real estate and infrastructure sectors, and increasing its staffing. Mr Flint has set out his stall to get the bank back on track after a series of scandals including HSBC's involvement in laundering money for Mexican drug cartels. And in January HSBC agreed to pay more than $101.1m to settle a US criminal investigation into rigged currency transactions, after admitting its traders twice misused confidential information provided to them by clients for its own profit.