April 15, 2024

DealBook: HSBC Profit Up 58%

HSBC said on Monday that profit rose 58 percent in the first quarter after the quality of its loan portfolio improved.

Net income rose to $4.2 billion from $2.6 billion in the period a year earlier, while charges for bad loans fell to $2.4 billion from $3.8 billion. Profit at its investment banking unit fell.

Stuart Gulliver, the chief executive, is scheduled to present a strategy overhaul to investors on Wednesday, including plans to reduce costs. Mr. Gulliver said on Monday that HSBC expected economic growth to slow this year from 2010.

“There remain a number of risks to the global recovery cycle in the short-term,” Mr. Gulliver said in a statement. “In the developed world, higher oil and food prices may slow the pace of recovery, while in emerging markets, higher inflation is dampening consumer sentiment.”

Earnings in Hong Kong and the rest of the Asia-Pacific region continued to grow in the first quarter even as the bank, which is based in London, spent more on employees and marketing. HSBC does not report more detailed profit figures on a quarterly basis.

HSBC continued to reduce its consumer finance portfolio in the United States and lending at its credit card business fell, the bank said. As a result, charges on bad loans fell by 30 percent. The business in North America remained profitable, but that profit fell 60 percent.

In Britain, HSBC set aside $440 million to cover possible claims by some customers that the bank had wrongly sold them a type of loan insurance. The step came after a British court ruled that several banks, including HSBC, were responsible to compensate customers. Barclays and the Lloyds Banking Group also provisioned for such costs.

Article source: http://feeds.nytimes.com/click.phdo?i=187cae5acb7f5597439903a4f27654a3

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