HSBC reports 5% jump in first-half profit helped by cost-cutting

The bank said that pre-tax profit had reached $10.2bn in the six months to the end of June, up from $9.7bn in the same period in 2016

Reported revenue hit $26.2bn for the period, which was down $3.3bn, due in part to currency moves as well as the sale of operations in Brazil (PA)

HSBC has reported a 5 per cent jump in first-half profit, helped by cost-cutting measures coupled with a strong performance in its UK and Hong Kong businesses.

Europe's biggest bank said that pre-tax profit had reached $10.2bn (£7.8bn) in the six months to the end of June, up from $9.7bn in the same period in 2016. The average forecast in a poll of analysts had been $9.5bn, according to Reuters.

HSBC also said that it would be buying back $2bn worth of shares before December. It completed a similar $1bn buyback in April as part of a wider re-purchase programme that has helped push the bank’s shares up by more than 50 per cent over the last year.

Once completed, the latest buyback will take the total value of the bank’s share buybacks since the second half of last year to $5.5bn.

“We have had an excellent first half of 2017, reflecting the changes we have made since our investor update in 2015 and the strength of our competitive position,” said chief executive Stuart Gulliver.

“Our three main global businesses performed well, increasing profit before tax and growing market share in many of the products that are central to our strategy. We remain on track to complete the majority of our strategic actions by the end of the year,” he said.

Reported revenue hit $26.2bn for the period, which was down $3.3bn, due in part to currency moves as well as the sale of operations in Brazil.

The bank said that its common equity tier 1 ratio – a measure of financial strength and stability – had hit 14.7 per cent at the end of June, up from 14.3 per cent three months earlier and 12.1 per cent a year ago.

HSBC generates more than half of its profit in Asia and on Monday it said that pre-tax profit in the region had risen 7 per cent during the period to $7.6bn, particularly spurred by revenue from its wealth management and insurance businesses in Hong Kong.

Mr Gulliver is set to retire from HSBC next year. But on Monday he said that he could stay at the bank until December 2018, if an external candidate is appointed to take over.

Additional reporting by news wires