HSBC Private Banking Logs Pre-Tax Loss In First Quarter
By Ainhoa Barcelona, Reporter in London, Wealth Briefing
The private banking segment of HSBC recorded a pre-tax loss of $125 million in the first three months of 2013, a sharp decline compared to its profit of $286 million from a year ago, and its profit of $230 million from the previous quarter.
The bank’s cost efficiency ratio rose by 127.5 per cent in the first quarter of 2013 compared to a 71.1 per cent rise from December 2012, and 64.8 per cent from March of the same year.
HSBC banking group as a whole reported a pre-tax profit of $8.5 billion for the first quarter, which was a 95 per cent rise from last year’s profit of $4.3 billion for the same quarter. This included adverse movements of $0.2 billion on the fair value of the firm’s own debt, $2.6 billion in the first quarter of 2012, and gains of $1.1 billion from disposals and the reclassification of an associate, at $0.2 million in the first quarter of 2012.
Underlying profit before tax was recorded as $7.5 billion for the first three months of this year, a 34 per cent rise on the year before. This primarily reflected higher revenue of $0.8 billion and lower loan impairment charges of $0.9 billion, with a notable improvement in the bank’s US consumer and mortgage lending portfolio.
The firm had a core tier 1 capital ratio of 12.7 per cent, up from 12.3 per cent at the end of 2012, as a result of the completion of management actions and profit generation offset by the effect of regulatory changes, the bank said.
Commenting on the trading conditions and outlook for 2013, the bank said: “Although broad macroeconomic challenges persist, we expect the mainland Chinese economy to accelerate after a slower than expected start to the year. We forecast that the US will continue to outperform its peers, though the pace of growth will be slow compared with past experience. We expect that the eurozone will contract, that emerging markets will grow at around 5 per cent, and that global growth will be around 2 per cent in 2013.”
As at 31 March 2013, HSBC had $2.6 trillion of client assets.
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