Sticky investors

4 May 2017 By Jun Yang

Europe’s largest bank by assets posted better-than-expected quarterly results. Growing revenue remains a challenge. But rising capital ratios make HSBC’s generous dividends look more sustainable, and could point to more buybacks ahead. That should keep shareholders onside.

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HSBC Holdings on May 4 reported a better-than-expected 19 percent fall in pre-tax profit for the first quarter. Pre-tax profit for the first three months of the year fell to $5 billion from $6.1 billion a year earlier, beating the $4.3 billion average of analysts' estimates.

The bank said profit fell mainly due to a change in the accounting treatment of the fair value on its own debt. The year-ago profit also included the operating results of a Brazil business that was sold in July.

Revenue declined 13 percent to $13 billion. The bank said it completed a $1 billion share buyback programme in April. Its common equity tier 1 ratio rose to 14.3 percent as of end-March, up from 13.6 percent a quarter earlier and 11.9 percent a year earlier.

HSBC shares were up 2.3 percent at HK$65.95 apiece in early afternoon trading in Hong Kong.

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