Hong Kong: Banking giant HSBC said on Monday that pre-tax profit rose 4.58 per cent to $10.7 billion in the first six months of the year and voiced “cautious optimism” despite the China-US trade row.
After wide-ranging cutbacks that saw 50,000 jobs axed in an overhaul announced in 2015, the bank said it was now hiring again as it seeks new growth areas.
“We are investing to win new customers, increase our market share, and lay the foundations for consistent growth in profits and returns,” said CEO John Flint.
He added that investments in the first half of the year included “hiring more frontline staff in our strongest businesses and expanding our digital capabilities in core markets”, saying that the aim was to improve customer service.
The pre-tax profit figures met analysts’ expectations as they predicted the bank would boost its bottom line.
Revenues were also up four per cent at $27.3 billion in the six months to June.
However, adjusted profit before tax of $12.1bn was down two per cent and revenues were tempered by a rise of seven per cent in operating expenses to $17.5 billion, which the bank said reflected investments in digital capabilities.
Shares in HSBC dipped slightly after lunch, trading at HK$72.65 from HK$73.40 before the figures were released, though they were still up 0.5 per cent from Friday’s close.
But Dickie Wong of Kingston Securities said a better cost-efficiency ratio and improved interest margins had helped the bank’s turnaround, while its investments had put it “in good shape”.
Seeking more frontline staff would help bring in customers, he added.
Wong added the escalating US-China trade row would have “minimal” negative impact on HSBC with its businesses in the Greater China region doing well. The London-based firm is enjoying a change in fortunes after a tough few years.
In January, it agreed to pay more than $100 million to US authorities after admitting to defrauding clients during multi-billion-dollar foreign exchange transactions.
And in December, US authorities lifted the threat of prosecution against HSBC, five years after it admitted to widespread money laundering and sanctions violations. — AFP
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