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A pedestrian passes by a light signal for HSBC Holdings Plc displayed in front of a bank branch in the central district of Hong Kong, China.
Anthony Kwan | Bloomberg | Getty Images
HSBC, the largest bank in Europe, released Friday a profit above expectations.
The bank said its pre-tax profit in the first quarter rose to $ 6.213 billion, an increase of 30.7 percent from $ 4.75 billion last year. Refinitiv's analysts' forecasts have shown that the pre-tax earnings of the bank are expected to reach $ 5.399 billion for the January to March period.
HSBC 's revenue for the quarter was $ 14.428 billion, up 5.24% from $ 13.71 billion last year. Refinitiv's revenues were estimated at $ 13.788 billion.
HSBC shares listed in Hong Kong ended Friday's trading session up 2.12%, reversing previous losses. Share performance for the year increased by approximately 7.56%. Meanwhile, the shares of the bank on the London Stock Exchange have lost about 3.22% since the beginning of the year.
Managing Director John Flint attributed the improvement to "strong revenue growth" in retail banking, wealth management and commercial banking.
"These results are encouraging," Flint said in a statement accompanying the announcement of financial results.
Other financial indicators observed by analysts and investors include:
- The net interest margin, which measures the profitability of loans, was 1.59% at March 31. This figure is below 1.66 at the end of 2018 and 1.67% in March of last year.
- Earnings per share were $ 0.21, up from $ 0.15 in March 2018.
- Reported operating expenses decreased 12% from the previous year.
Lower spending helped HSBC recover a "positive adjusted jaw" of 6% in the first quarter. The jaw ratio is positive when income rises faster than costs. Investors were monitoring the bank's progress in controlling costs, particularly after failing to meet its positive jaws goal last year. HSBC ended the year 2018 with jaws below 1.2%.
The bank announced a dividend of $ 0.10 per common share. He added that he would announce his decision regarding the 2019 share buybacks at his next earnings release.
HSBC, headquartered in London, derives the bulk of its profits from Asia. A number of its UK banking counterparts such as Barclays and Royal Bank of Scotland over the last few weeks have announced a decline in their profits in the first quarter.
But Standard Chartered, another British bank specializing in emerging markets, including Asia, has recorded a 10% rise in its quarterly profits.
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