Bangkok--11 May--HSBC
HSBC Holdings plc announces today its underlying profit before tax reached US$5.5bn while profit after tax rose by 52% to US$4.4bn in Q1/11.
HSBC Group Chief Executive, Stuart Gulliver commented: “Underlying profits held up well against a strong Q1 2010, we were profitable in all regions and customer groups, profits increased in each of our faster-growing regions and credit quality improved. There was double-digit revenue growth in many of our businesses in the faster-growing regions. We continued to increase customer lending in all regions, except North America, with strong growth in Asia and Latin America. Higher lending balances, along with strong trade volumes, contributed to the rise in revenues in those regions. Set against this, as expected, we faced revenue headwinds in Global Banking and Markets, notably in Balance Sheet Management, and in the US, where we continued to run off the Consumer Finance portfolios and Card balances reduced. Loan impairment charges once again fell significantly as economic conditions stabilised and we reduced portfolio risk and improved collections.”
Mr. Stuart said: “The world economy continued to expand during the quarter, and although emerging market output growth eased slightly, we believe that these markets will once again outpace mature markets this year. However, there remain a number of risks to the global recovery cycle in the short-term. In the developed world, higher oil and food prices may slow the pace of recovery while, in emerging markets, higher inflation is dampening consumer sentiment. Despite this, we expect economic growth to continue, albeit more slowly than in 2010.”
For the performance of the Asia Pacific operations (excluding Hong Kong), economic growth slowed from 2010 levels and inflation rates were higher in key markets. The disaster in Japan seemed to have a limited economic effect in the quarter. While monetary tightening in mainland China was applied on a number of occasions to reduce credit growth, most Asian economies continued to perform robustly. Pre-tax profits increased by 25%, as a result of a substantial increase in net interest income following the robust lending growth throughout 2010 and into 2011 and a higher contribution from our associates in mainland China. Revenues rose by 18%, driven by higher asset and deposit balances, and stronger trade volumes and wealth management income. We continued to grow lending, with balances 5% higher overall and increasing in all customer groups during the quarter. Costs rose by 17% compared with Q1 2010, mainly as a result of investment in staff and marketing to support business growth. Costs were 2% lower than in Q4 2010.
Media enquiries to Varanandha Sutthapreeda on 0-2614-4609 or Savittree Muadmuang on 0-2614-4606.