HSBC reports 'encouraging' 1Q results

11 May 2009

HSBC, Europe's largest bank reported a buoyant start to 2009, with "record results in global banking".

The bank has posted pre-tax profits in the first quarter that it said were "well ahead" of its performance over the same period last year. The company's first-quarter underlying pretax profit was, driven by $6.6 billion of gains on the fair value of its own issued debt. Excluding those gains, HSBC said profits were lower but still significantly higher than in the last quarter of 2008.

Chief executive Michael Geoghegan described the company's operating performance as encouraging on record results from its global banking and markets divisions.

He added that with the recent rights issue that raised $17.8 billion the company was well poised to ride out the economic uncertainty ahead and to take advantage of the growth opportunities opening up.

The company did not put a figure to the amount it has set aside for coverage of bad debts, though it said that it was higher than on the same period for the last year.

It said loan impairment charges and other credit risk provisions were higher than in Q1 but lower than in Q4 2008 on both an underlying and a reported basis, and in the US were also slightly lower than expected. The bank had in March said that up to 1,200 of its staff in the UK could face redundancy.