London-based bank HSBC reported an encouraging profit growth in the first half, as it surpassed analyst expectations.
Pretax profit rose from five per cent to $10.7bn in the six months up to June 2018, while April-June quarter profit was $5.96bn, higher than the $5.79bn predicted by analysts.
Reported revenue came in four per cent higher at $27.3bn, with growth reported in all of HSBC’s global businesses.
Lending growth in the first half got a five per cent increase since the start of the year to stand at $43bn.
Adjusted operating expenses also rose eight per cent to $16.4bn.
Why it’s important
The results will be a welcome relief for investors after the bank reported a surprise drop in profits earlier this year.
Its large cash reserves have seen it announce a $17bn investment in expansion and tech as it puts a rocky period of restructuring behind it and looks to focus on growing in key markets, such as in Asia.
It has also recently finished setting up its ringfenced bank, becoming the latest of the big UK lenders to complete the vital post-financial crisis reform.
Yesterday evening, HSBC held firm against a set of investors who wanted it to reverse changes it had made to bonds which could expose them to losses on the back of “disco” securities if the bank collapsed.
What HSBC said
John Flint, group chief executive, said:
We are taking firm steps to deliver the strategy we outlined in June. Today’s results, which are in line with our expectations, show strong revenue growth in our global businesses. This is creating room to invest while maintaining our commitment to full-year positive adjusted jaws. We are investing to win new customers, increase our market share, and lay the foundations for consistent growth in profits and returns.