HSBC, Europe’s largest bank by market value, said its Middle East business did not fare as badly as the whole group in the first quarter of the year.
Still, HSBC Middle East reported a 4.2 per cent decline in profit in the first three months as lower interest rates compress margins for Arabian Gulf lenders.
HSBC's regional business reported a pre-tax profit of US$502 million compared to $524m in the same period the previous year. Profit from its retail banking and wealth management activities softened to $82m from $90m, while commercial banking income declined to $181m from $192m.
Meanwhile, the bank as a whole said its first-quarter income dropped 20 per cent. That met analyst expectations according to Bloomberg News, as gains from asset sales fell and revenue from investment banking dropped.
Pretax profit declined to $6.79 billion from $8.43bn a year earlier, London-based HSBC said. That met the $6.77bn average estimate of six analysts surveyed by Bloomberg. Operating income before provisions slipped to $15.9bn from $18.4bn.
The bank, which earns most of its profit from Asia, is focusing on its most lucrative markets amid increased regulation and compliance costs. While the chief executive Stuart Gulliver has closed or sold 63 businesses since 2011, costs are running above his target of about 50 per cent of revenue, while return on equity, a measure of profitability, is still short of his goal.
mkassem@thenational.ae
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