HSBC’s pre-tax profit rose 4.6% in the first half of 2018 to $10.7 billion.
“We are investing to win new customers, increase our market share, and lay the foundations for consistent growth in profits and returns,” John Flint, HSBC’s group chief executive, said.
The bank is investing up to $17 billion over three years in areas like technology and China.
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HONG KONG/LONDON (Reuters) – HSBC Holdings said on Monday its pre-tax profit rose 4.6% for the first half of the year, as Europe’s biggest bank showed early progress in its strategy of returning to growth mode after years of restructuring.
HSBC reported a pre-tax profit of $10.7 billion in the six months through June, up from $10.2 billion in the same period a year earlier.
The bank’s pretax profit of $5.96 billion in the April-June quarter was higher than the $5.79 billion average of analysts’ forecasts compiled by the bank.
HSBC’s shares fell 1% in early trade despite the beat. Stockbroker Hargreaves Lansdown said in an emailed statement that investors are wary of rising costs outpacing income.
“The market has reacted cautiously to the numbers though, with the shares down 1% in early trade, because within the detail the group reported costs rising significantly faster than income,” the broker said in an email. “Cost growth of 7% reflected increased investments into growth and technology, far outpacing the 2% of revenue growth.”
John Flint, HSBC’s group chief executive, said in a statement: “We are taking firm steps to deliver the strategy we outlined in June. We are investing to win new customers, increase our market share, and lay the foundations for consistent growth in profits and returns.”
Flint set out in June a three-year plan to invest $15 billion-$17 billion in areas such as technology and in China, as part of the bank’s swing from a strategy of cost-cutting to one of growth.
HSBC’s retail banking and wealth management, and commercial banking divisions performed most strongly, Flint said, adding both continued to gain from a positive interest rate environment.
Pretax profits for the first half from Asia jumped 23% to $9.4 billion, representing 88% of the group’s pretax profits. Flint re-emphasized one of the bank’s strategic targets in his June presentation.
The bank also announced that it had appointed Jonathan Symonds, formerly chairman of HSBC Bank, as its deputy chairman.
(Reporting by Alun John and Lawrence White; Editing by Muralikumar Anantharaman)
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Source:: Business Insider