Customers use ATMs outside a branch of a HSBC bank in London, yesterday.
Hong Kong: HSBC said profits were up in the first half of the year after a turbulent 2016 which saw huge writedowns and restructuring costs as it laid off thousands of staff.
The Asia-focused giant has been on a recovery drive over the past two years, streamlining its operations and exiting unprofitable businesses.
Like many global banks it has struggled to boost profits as China’s economy slows and uncertainty caused by Britain’s looming exit from the European Union casts a shadow over the sector.
In addition, HSBC has grappled with stricter capital rules, low interest rates and scandals stemming from its own misbehaviour.
However, yesterday’s results were an improvement as analysts said its overhaul was bearing fruit.
Reported pre-tax profit for the six months to June rose five percent to $10.2bn compared with $9.7bn for the same period last year.
Shares closed up 2.62 percent at $10.06 in Hong Kong, yesterday. The half-year results showed operating expenses dropped 12 percent to $16.4bn, partly stemming from a sell-off of its Brazil operations. Chairman Douglas Flint described the performance as “extremely pleasing”.
Flint said there were still uncertainties due to increasing geopolitical tensions and “ambiguous predictions” around Britain’s future relationship with the EU post-Brexit, but described HSBC’s performance as resilient.
In his last statement as chairman before stepping down in October, Flint warned over the the possible repercussions of the Brexit deal. He also called for more progress on preventing “bad actors” from accessing the financial system.
“As digitalisation of commercial activity increases, the risks of confidence-threatening disruption and economic loss, not least from cyber attacks, are amplified,” Flint said.
Analysts said Monday’s results had outstripped predictions.
Net profit for the first half of the year rose 10 percent to $6.99bn from $6.36bn for the same period in 2016. HSBC also announced a share buyback of up to $2bn, expected to be completed in the second half of the year.
The bank announced the appointment of a new chairman in March as part of a management overhaul that will also see it choose a new chief executive to replace Stuart Gulliver.
