HSBC banks a 31pc profit rise but warns over global jitters

HSBC’S senior executives have promised to keep a close eye on costs in efforts to hit the bank’s financial targets in the face of growing uncertainty about the global economy.

Discussing the bank’s performance during the first three months of the year, Ewen Stevenson, chief financial officer, said that although no “bankwide cost programme” existed, the group could get tougher on costs later this year if necessary.

John Flint, chief executive, said the group was “proactively” managing expenses in the light of a more “uncertain” global economy.

Mr Stevenson added that Brexit could deliver “several broad economic outcomes”, which had required HSBC to pay closer attention to its UK credit business. The group said expected credit losses and other credit impairment charges had increased, particularly in UK commercial banking.

Mr Stevenson also said Brexit was “a lot less complex” for HSBC after the bank moved some of its European subsidiary businesses from the UK to France last year.

The banking giant comfortably beat market expectations during the first quarter with a 31pc rise in pre-tax profit to $6.2bn (£4.7bn) compared with the same period last year. Favourable market movements drove a 9pc rise in adjusted revenues to $14.4bn.

The quarter also reflected strong growth across its retail banking and wealth management arms, commercial banking and strong traction in Asia.

The US turnaround also continued, with rising customer numbers, although management said it remained its “most challenging strategic priority”.

At the group level, return on tangible equity rose to nearly 10.6pc during the first quarter, with a sustained longterm target of more than 11pc by 2020.

The bank also confirmed it is working with American regulators to navigate the latest cycle of US stress tests.

Investec analyst Ian Gordon said first quarter numbers showed a clear improvement after a “pretty awful” end to 2018.

Shares rose 2.4pc to 683p, some way above lows of 601p hit during the broader market slump last autumn.

Michael Kempe at Link Market Services said investors were likely to be disappointed after the profits lift failed to lead to a higher quarterly dividend, which was held at 10 cents a share.