Asia profit helps HSBC first-half profit jump
(5 August 2015 – United Kingdom) HSBC Holdings PLC’s first-half profit steamed ahead on the back of income from Asia and securities trading with pre-tax profit rising 10 percent to US$13.6 billion (A$18.7 billion).
The result was driven by a 19 percent jump in Asian earnings, making it the bank’s best performing region and giving a boost chief executive Stuart Gulliver’s strategy to shift investment to Asia, while cutting unprofitable divisions.
Additionally, Banco Bradesco SA agreed to buy HSBC’s Brazilian unit for US$5.2 billion in cash.
Pretax profit in Asia rose to $9.4 billion from $7.9 billion a year earlier, with the region accounting for 69 percent of the bank’s first-half earnings. Europe’s share of profit fell to 16 percent from 18 percent, while North America accounted for about 5 percent, down from 7 percent.
While HSBC’s first-half revenue rose to $32.9 billion from $31.2 billion, net operating income in Asia jumped 16 percent to $14.1 billion, more than three times the growth in Europe.
In the statement chairman Douglas Flint said; “Although equity flows into emerging markets retreated, equity volumes in Hong Kong and mainland China expanded markedly.”
“As a result, HSBC’s Wealth Management revenues in Hong Kong from equities, mutual funds and asset management increased significantly.”
Gulliver said he expected Asian performance will “undoubtedly” worsen in the second half as Chinese growth slows and the Shanghai Composite Index posted its biggest monthly loss in six years in July.
Wealth management revenue will decline as sales of exchange-traded funds fall and the investment bank will see “more muted activity” among major clients, Gulliver said.
Subscribe