HSBC headquarters buildings in Hong Kong.
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Europe’s largest bank by assets said on Tuesday that pretax profit in the first quarter jumped 79% year over year to $5.78 billion, largely beating a $3.3 billion analyst forecast. After-tax profit was up 82% to $4.6 billion. The bank said in a release that revenue in the quarter shrank by 5% to $13 billion due to declining interest rates.
All regions were profitable in the first quarter including the U.K. division, which had struggled last year.
HSBC released $400 million worth of provisions of the $3 billion it had booked last year due to the Covid-19 pandemic.
HSBC said that it would keep implementing the strategic plan it unveiled in February. This includes redeploying $100 billion of risk-weighted assets to Asia, where it makes most of its profit, and selling its unprofitable French operations to private equity group Cerberus Capital Management.
“Uncertainties remain,” cautioned Chief Executive Noel Quinn. The outlook depends on the success of Covid-19 vaccination campaigns, the speed of recoveries and the length of government restrictions on activity. Meanwhile, HSBC still trades at a 30%-odd discount to book value.
