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IBOS member HSBC has beaten analysts’ expectations for its Q1 2017 results as strong trading conditions, rising interest rates and a weaker dollar lifted earnings.

Pre-tax profits, adjusted for one-offs and currency moves, reached $5.9bn, surpassing consensus forecasts of $5.3bn. Adjusted revenues from retail banking — HSBC’s single largest unit — rose 15 per cent to $5bn from Q1 2016, while those from its global banking and markets division rose 10 per cent to $3.9bn.

Stuart Gulliver, Group Chief Executive at HSBC, commented:

“This is a good set of results. The increase in adjusted profit was driven by strong performances in three of our four global businesses. Global Banking and Markets had a great quarter; Commercial Banking delivered higher revenue from our liquidity and cash management activities; and Retail Banking and Wealth Management was supported by rising interest rates and renewed customer investment appetite.

“In addition, we completed a $1bn buy-back, and made progress on our cost-saving programmes, giving us further confidence in our ability to hit the higher cost-saving target that we announced at our annual results.”

Global Banking and Markets had a strong quarter, with large adjusted revenue increases in the majority of businesses compared with the same period last year. Rising interest rates and increased balances in Global Liquidity and Cash Management helped deliver improved adjusted revenue in Commercial Banking.

Retail Banking and Wealth Management also performed well, supported by rising interest rates, renewed customer investment appetite, the impact of market movements on HSBC’s life insurance manufacturing business, and strong wealth product and insurance sales across all categories.

Below are the highlights of HSBC’s Q1 2017 financial performance:

  • Adjusted profit before tax of $5.9bn, up $0.6bn or 12% compared with Q1 2016, reflecting lower LICs and higher revenue
  • Adjusted revenue of $12.8bn, up $0.3bn or 2%, mainly in RBWM from life insurance manufacturing and growth in current accounts, savings and deposits, and in GB&M from Rates and Credit
  • Reported operating expenses of $8.3bn were $0.1bn or 1% higher; adjusted operating expenses of $7.2bn were $0.2bn or 3% higher, mainly due to a credit in the prior year relating to the 2015 UK bank levy
  • Compared with Q4 2016, reported profit before tax was up $8.4bn; adjusted profit before tax was up $3.3bn
  • Strong capital base with a common equity tier 1 (‘CET1’) ratio of 14.3% and a leverage ratio of 5.5%

Read the full press release via HSBC here and an article in the Financial Times here.