0603 GMT December 13, 2019
The bank said its reported profit before tax in the first quarter was $6.213 billion, a 30.7-percent jump from last year's $4.755 billion, CNBC wrote.
Analyst forecasts compiled by Refinitiv showed that the bank's reported profit before tax was expected to come in at $5.399 billion for the January to March period.
HSBC's revenue for the quarter was $14.428 billion, 5.24 percent higher than last year's $13.71 billion. Refinitiv's estimate for revenue had been $13.788 billion.
HSBC's Hong Kong-listed shares rose by around 2.2 percent when trading resumed after a lunch break, reversing earlier losses. The stock performance for the year is up by around five percent. Meanwhile, the bank's London-listed shares have lost around 3.22 percent so far this year.
Chief Executive John Flint attributed the improvement in earnings to ‘strong revenue growth’ in the retail banking and wealth management, and commercial banking businesses.
"These are an encouraging set of results," Flint said in a statement accompanying the financial results announcement.
Other financial metrics that analysts and investors were watching include:
● Net interest margin, a measure of lending profitability, was 1.59 percent as of March 31. That's lower than 1.66 at the end of 2018 and 1.67 percent in March last year.
● Earnings per share was $0.21, up from $0.15 in March 2018.
● Reported operating expenses declined by 12 percent from a year ago.
The fall in expenses helped HSBC returned to ‘positive adjusted jaws’ of six percent in the first quarter. The jaws ratio is positive when revenue grows faster than costs. Investors had been watching for the bank's progress in containing costs, especially after it failed to achieve its target of positive jaws last year. HSBC ended 2018 with jaws of minus 1.2 percent.
The bank announced a dividend of $0.10 per ordinary share. It added that it will announce its decision on 2019 share buybacks at its next earnings release.
HSBC, headquartered in London, earns most of its profits from Asia. A number of its UK banking peers such as Barclays and Royal Bank of Scotland in recent weeks reported declines in first-quarter profits.
But Standard Chartered, a fellow British bank with a focus on emerging markets including Asia, reported a 10-percent jump in quarterly profit.