HSBC reported a near doubling in first quarter earnings today, demonstrating the benefits of a three-year restructuring, cost cuts and a big drop in bad debt charges.
Europe's largest bank has moved faster and more aggressively than many of its peers to reduce costs in the wake of the financial crisis, shedding 38,000 jobs and closing or selling more than 50 businesses.
The bank reported a pre-tax profit of $8.4 billion, up from $4.3 billion a year ago and above the average forecast of $8.1 billion from analysts polled by the company.
A $1.1 billion gain from disposals aided earnings as did a halving of bad debt provisions to $1.2 billion, helped by the winding down of some US loan books.
The bank said that costs in the first quarter were down 10% from a year ago. Costs are now just over 53% of income, close to the bank's target to get them below 52% by the end of the year.
Across Europe, smaller rivals are also cutting back. French banks Société Générale and Credit Agricole today committed to keep cutting costs to help offset a weak domestic economy.
HSBC has compensated for weakness in Europe with strong growth in Asia and the bank said it expected the mainland Chinese economy to accelerate after a slower than expected start to the year. It said it expects the euro zone economy to contract this yea
