Financial Results
Adjusted Pre-Tax Profit Drops At HSBC's Private Bank

Adjusted pre-tax profit at the private banking arm of HSBC fell in the first quarter of 2016.
HSBC today logged
adjusted pre-tax profit of $112 million for its private banking
arm in the first three months of this year, down from $181
million a year earlier.
For the whole of HSBC, adjusted pre-tax profits in Q1
were $5.4 billion, which was $1.2 billion or 18 per cent
lower than for a year earlier. This was primarily driven by
lower revenue and higher loan impairment charges, whilst
operating expenses were broadly unchanged, it said in a statement
today.
At around 10:00 local time in London, shares in the bank were
unchanged.
Within global private banking, revenue fell by $100 million or 15
per cent, driven by lower brokerage and trading activity in both
Europe and Asia, reflecting adverse market sentiment in
unfavourable market conditions.
However, in the quarter, HSBC continued to grow the parts of the
business that fit its "desired model" of private banking,
attracting net new money of $4 billion, notably in the UK, partly
offset by net outflows in Hong Kong, it said.
Graham Spooner, investment research analyst at The Share Centre,
said: “HSBC’s CEO Stuart Gulliver noted that despite profits
being down against a very strong first quarter of 2015, the
company ‘increased market share in many of the product areas that
are critical to our strategy’. Alongside this, investors should
appreciate that the dividend was not axed, as many analysts had
feared, and was held at 10 cents per share. This was another sign
that the group’s results were not as bad as they could've
been."
“Income seekers in the banking sector have been hit hard in
recent years. HSBC has remained a significant payer and
though progress may continue to be slow in the face of many
challenges, the shares could be a better option than other banks.
The company is viewed as being more conservatively managed with a
superior balance sheet and deposits. HSBC has a diverse mix
of business and geographical spread, and in the present climate
we recommend the company as a ‘buy’ for contrarian investors, but
recommend building a holding over timem," Spooner said.