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October, 201812:19 AM



HSBC pre-tax profit up 4.58% at $10.7 bn in first half

HSBC pre-tax profit up 4.58% at $10.7 bn in first half

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.

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06.08.2018 03:44 PM

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.

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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