HSBC profits almost double to $8.4bn but more jobs may be lost
Chief executive Stuart Gulliver hints more job cuts could be on the way
Banking giant HSBC reported soaring profits today before hinting that more job cuts could be on the way - two weeks after it announced it was shedding thousands of posts.
Pre-tax profits almost doubled to $8.4 billion (£5.4 billion); and after taking out one-offs, underlying profits rose 34% to $7.59 billion.
Chief executive Stuart Gulliver said the industry was moving into “calmer waters” in the wake of the credit crunch and the PPI mis-selling scandal as charges for bad loans and compensation fell.
But Mr Gulliver, who was paid £7.4 million last year, said he could not give any assurances over potential future job losses.
Worldwide, the bank has lost 40,000 of its 300,000 employees as a result of restructuring and sell-offs since Mr Gulliver took over at the start of 2011.
The cuts are 10,000 more than the number predicted at the time. Mr Gulliver said HSBC was responding to “economic and regulatory” circumstances.
The bank, which is due to give a key strategy update next week, expects total staff numbers to fall eventually to 254,000.
A fortnight ago, HSBC announced a shake-up affecting more than 3,000 UK jobs, though around 2,000 further posts being created were expected to be mostly filled by displaced employees.
But today Mr Gulliver said: “I can't give any assurance that there won't be further job cuts.”
The bank said its improved profits for the first quarter of the year reflected higher revenues and lower loan impairment charges, with a notable improvement in its US consumer and mortgage lending business.
Its UK customer redress programme, which includes compensation for PPI as well as card and identity protection insurance policies, was $164 million (£106 million) in the first quarter, compared to $286 billion (£184 million) in the last three months of 2012.
The figure shows that the pot of money set aside to reimburse customers is still swelling but at a reduced rate.
With loan impairment charges - losses from bad debts - also falling, it suggests HSBC is beginning to overcome the difficulties of the credit crunch and the mis-selling claims that have dogged the industry over the last few years.
Mr Gulliver said: “As an industry, we are moving into calmer waters but I don't think it is time to reduce the vigilance that we need to demonstrate.”
A poor outlook in the eurozone and subdued growth in the UK continued to pose concerns, he said.
Globally, revenue rises were “muted” though there were increases in areas such as residential mortgages and commercial banking in Hong Kong and the UK, and efficiency savings.
Mr Gulliver said: “We have had a good start to the year, with growth in reported and underlying profit before tax.”
Analysts at Credit Suisse said the results were “better than expected”, with shares up more than 3 per cent.
- 2 Rarest Beanie Baby of them all could be sold for £62,500 on eBay
- 3 Professional big game hunter Ian Gibson crushed to death by elephant during hunt
- 4 Farmer told to tear down mock-Tudor castle after hiding construction behind hay bales
Migrants crossing the Mediterranean: Pope Francis joins calls for EU action on boat refugees
Yemen crisis: Meet the child soldiers who have forsaken books for Kalashnikovs
Alan Rickman admits editing 'terrible' script with friends in Pizza Hut behind backs of writers on Robin Hood: Prince of Thieves
Rarest Beanie Baby of them all could be sold for £62,500 on eBay
Isis in Afghanistan: Group claims responsibility for Jalalabad suicide bombing that killed 35
If I’m being racially abused I don’t need a stranger with a saviour complex to rescue me
The only black face in the Ukip manifesto is on the page about overseas aid
Ukip is the only main political party to not address LGBT rights in its manifesto
Food banks: One million Britons will soon be using them, according to Trussell Trust
BBC election debate: The one photo that summed up the whole 90-minute leaders debate
Religion isn't growing, it is becoming vigorous in its demise, says philosopher AC Grayling
iJobs Money & Business
£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...
£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...
£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...
£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...