HSBC Q1 pre-tax net nearly doubles to $8.4 bn

Largest European bank HSBC Group on Tuesday said its March quarter pre-tax profit has nearly doubled to $8.4 billion compared to the first quarter of 2012.

The profits were boosted by the $1.1 billion proceeds from sale and reclassification of the bank's Chinese insurance arm Ping An and a massive boost from trading income coupled with the savings from cost-cutting.

Excluding this one-time gain, Q1 pre-tax net rose 34 per cent to $7.6 billion over the year-ago period, aided by a revenue of $800 million and lower loan impairment charges of $900 million, with a notable improvement in US consumer and mortgage lending portfolio, a bank statement said.

Underlying revenue included a net gain of $600 million on completion of the sale of the bank's remaining shareholding in Ping An Insurance Company of China and a $500 million favourable debit valuation adjustment on derivative contracts, the London-based lender said.

"The remaining revenue was broadly unchanged," Group Chief Executive Stuart Gulliver said, adding, "We achieved revenue growth in key areas, including residential mortgages and commercial banking, in both our home markets of Hong Kong and Britain, and financing and equity capital markets."

The bank said during the quarter, it saved an additional $400 million, taking cost efficiency ratio to 53.2 per cent in from 56.9 per cent a year ago.

HSBC has been aggressively cutting cost in the wake of financial crisis, shedding 38,000 jobs and closing or selling more than 50 businesses.

Its Asia business, excluding those from Hong Kong, contributed to $3.35 billion, up from $2.02 billion a year ago, while Hong Kong business grew to $2.15 billion from $1.89 billion, making Asia its largest market.

Revenue for the region declined to $1.04 billion from $1.13 billion a year ago. Its Hong Kong revenue however inched up a bit to $898 million from $788 million. By revenue, Europe is the largest market for the bank with $2.52 billion, up from $2.41 billion a year ago.

The financial giant, whose domestic subsidiary is the oldest and the second largest bank by balance-sheet in the country, did not offer India numbers.

The bank's net operating income before loan impairment charges and other credit provisions rose to USD 18.4 billion in the reporting quarter, which is 14 per cent higher than in first quarter of 2012, Gulliver said.