LONDON: HSBC Holdings has reported profit after tax $4.9 billion for the quarter ended March 31, 2019, which is up 31% from the profits recorded in the corresponding period last year.
Earnings per share (EPS) of 21 cents is up 40% in 1Q 2019.[the_ad id=”31605″]On 3 May 2019, the Board announced a first interim dividend for 2019 of $0.10 per ordinary share. Reported revenue of $14.4 billion in 1Q 2019 was $0.7 billion or 5% higher than in 1Q 2018.
Reported profit before tax of $6.2 billion in 1Q 2019 was $1.5 billion or 31% higher than in 1Q 2018. This increase reflected higher revenue in RBWM due to balance sheet growth and wider margins in Retail Banking, and in CMB due to growth in Global Liquidity and Cash Management (GLCM) and Credit and Lending (C&L).
Revenue growth included the favourable effects of market impacts in insurance manufacturing, credit and funding valuation adjustments in GB&M and the non-recurrence of a 1Q 2018 adverse swap mark-to-market loss on a bond reclassification in Corporate Centre.
Operating expenses were $1.2 billion lower, reflecting net favourable movements in significant items, notably as 1Q 2018 included a charge of $0.9 billion for settlements and provisions in connection with legal and regulatory matters.
This was partly offset by an increase in expenditure on investments to grow the business, including enhancements of digital capabilities. In addition, expected credit losses and other credit impairment charges (ECL) increased, notably in CMB in the UK and Asia.
Excluding net favourable movements in significant items of $1.1 billion and adverse foreign currency translation differences of $0.2 billion, profit before tax increased by $0.6 billion or 9%.
John Flint, Group Chief Executive said, “We have made a good start to 2019. Reported profit after tax was up significantly on 1Q 2018, thanks largely to strong revenue growth in our Retail Banking and Wealth Management and Commercial Banking businesses, and favourable movements in significant items. Return on tangible equity – our headline measure – was up considerably on the same period last year, and we delivered positive adjusted jaws over the quarter.
“Our three main global businesses performed well. Retail Banking and Wealth Management generated a significant increase in adjusted revenue on the back of higher lending and deposit balances, notably in the UK and Hong Kong, and from positive market impacts in insurance manufacturing. Commercial Banking delivered a double-digit increase in adjusted revenue, owing mainly to our continued strength in transaction banking, with growth across all regions.
“Global Banking and Markets adjusted revenue was up relative to a strong first quarter last year, with favourable movements on credit and funding valuation adjustments and growth in transaction banking more than offsetting the impact of economic uncertainty on our Global Banking, equities and fixed income businesses.
“These are an encouraging set of results, and we remain focused on executing the strategy we outlined last June. At the same time, we remain alert to risks in the global economy. We are proactively managing costs and investment in line with this more uncertain outlook, and will continue to do so”.