HSBC ‘ to post profits plunge’
HSBC is expected to post a sharp fall in profits today, as regulatory charges and lower investment banking revenues continue to dog the sector.
The City expects the lender to post a first- quarter pre- tax profit of £ 2.9billion, a 39 per cent drop from a year ago, due to a fall in investment banking work across the industry.
Analysts at Goldman Sachs said “the bulk” of the fall in profit at HSBC would come from “a steep fall in the investment banking space”.
Last month, Barclays also saw profits tumble by a quarter in the first three months of the year to £ 793million after it was hit by tough trading in its investment banking arm.
HSBC management comfortably survived a shareholder vote over executive pay earlier this month, which passed a pay package of £ 7.3million for chief executive Stuart Gulliver.
The bank saw 90.5 per cent voting in favour of the firm’s remuneration report, which also included a pay deal for chairman Douglas Flint worth £ 2.49million for 2015. However, the lender said it would take steps to review pay packages for executive directors following shareholder concerns.
HSBC saw annual pre- tax profits rise 1 per cent to £ 13.2billion when it announced its annual results in February, but fell short of analyst expectations of £ 15.2billion.
The bank – which gets a big slice of its profits from Asia – blamed “seismic shifts” in the global economy which it said were triggered by a drop in oil prices, slowing economic growth in China and low interest rates in developed economies.
Amid a busy period for the bank, Mr Flint announced in March that the hunt had begun for his successor who will also take charge of finding a new chief executive to replace Mr Gulliver.
The bank announced plans last year to cut 50,000 jobs globally by the end of 2017 in a bid to save £ 3.3billion.