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HSBC profit jumps in Q1 on fall in bad debt provisions
StockMarketWire.com
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Banking group HSBC reported a jump in first-quarter profit as lower expected credit losses helped offset a fall in revenue on lower interest rates.
For the first quarter of the year, pre-tax profit rose 79% to $5.8 billion year-on-year, while revenue fell 5% to $13.0 billion.
The fall in revenue continued to reflect low interest rates, with net interest margin slipping 33 basis points to 1.21% year-on-year.
Common equity tier 1 capital ratio was 15.9%, unchanged from 31 December 2020.
The results were favourably impacted by net expected credit loss releases, particularly in the UK, reflecting improved economic forecasts, the company said.
Reported expected credit loss were a net release of $0.4 billion, compared with a $3.0 billion charge in 1Q20.
The company said it would consider whether to announce an interim dividend at its 2021 half-year results in August.
Looking ahead, the company expected its expected credit loss charge for 2021 to be below the medium-term range of 30 basis points to 40 basis points of average loans that it indicated at its 2020 annual results.
'There remains a high degree of uncertainty as countries emerge from the pandemic at different speeds and as government support measures unwind,' the company said.
Story provided by StockMarketWire.com
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