Yield shocks

3 May 2016 By Peter Thal Larsen Follow @Peter_TL

Choppy markets and higher bad debts knocked HSBC’s pre-tax profit by 14 pct in the first quarter. Erstwhile rival ANZ slashed its dividend after first-half earnings dropped almost a quarter. The process of making banks safer and less exciting is proving far from straightforward.

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HSBC on May 3 reported a smaller-than-expected drop in quarterly profit, as a resilient performance from its commercial banking unit partly offset weakness in its trading business caused by the grim global market environment early in the year.

HSBC’s pre-tax profit for the first three months of the year fell to $6.1 billion, down from $7.1 billion a year ago but above the average forecast of $4.3 billion from analysts polled by the company.

Underlying revenues fell 4 percent year on year to $13.9 billion.

Earlier the same day, ANZ reported its biggest half-yearly decline in cash profit since 2008 and slashed its dividend for the first time in seven years.

Cash profit for the six months to March 31 slipped to A$2.78 billion ($2.13 billion), from A$3.68 billion a year ago. The Australian bank lowered its interim dividend by 7 percent to 80 cents per share.

ANZ shares closed up 5.6 percent to A$25.05.

In early afternoon trading in Hong Kong, HSBC shares were up 0.8 percent at HK$52.2.

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