Results round-up

HSBC's first-quarter profits fell 14% compared to last year but was better than analyst forecasts, with chief executive Stuart Gulliver expressed confidence that cost-reduction plans now under way will hit their target by the end of next year.

Amid a tough few months for the industry, the banking giant saw its profits before tax dwindle 14% to $6.12bn at the reported level, or 18% to $5.43bn on an adjusted basis.

The consensus forecast was for a statutory PBT of $4.30bn and an adjusted figure of $4.89bn, with the difference attributed by analysts primarily to a $1.15bn fair value gain on own debt as spreads widened during the period.

Adjusted revenue of $13,914m was down a disappointing 4% and impairments were up almost 150%, though Gulliver argued it was a resilient performance amid the tough market conditions that affected the entire sector and versus a very strong comparative period last year.

Lower revenue was mainly in the global banking and markets's FX, equities and credit segments, as well as the life insurance unit of Retail Banking and Wealth Management, partly offset by continued momentum in commercial banking.

Earnings per share of $0.20 were down 23% from the $0.26 in the equivalent period last year.

The board held the quarterly dividend flat at $0.10 per share.

Pointing out increased market share in many key product areas, Gulliver said: "Commercial Banking continued its momentum in spite of the slow-down in global trade, and we increased market share across our strategic trade corridors. We also grew revenue elsewhere in Retail Banking and Wealth Management, particularly from current and savings accounts in Hong Kong and the UK, and personal lending in Asia and Mexico."

Tight cost management and the beginning of the cost-saving programmes cut operating expenses excluding the bank levy by $236m, while loan impairment charges were down by a significant $450m, both relative to the fourth quarter of 2015.

The CET1 ratio and the leverage ratio both remained strong at 11.9% and 5.0% respectively, at their year-end positions, though the former remains below management's target range of 12-13%.

Aberdeen Asset Management tumbled on Tuesday as it reported a slump in first-half profit amid weakness in emerging markets.

In the six months to the end of March, underlying pre-tax profit fell 40% to £162.9m, as net revenue declined 20% to £483.6m.

Meanwhile, assets under management dropped to £292.8bn from £330.6bn the year before, and the company kept its interim dividend per share unchanged at 7.5p.

Chief executive Martin Gilbert said: “These results reflect the challenging conditions Aberdeen has faced during the past three years, in particular the weakness in emerging markets. However our balance sheet strength has allowed us to continue to invest in the business, including the completion of a number of bolt-on acquisitions which have added new capabilities and new client channels.

“We have strengthened the management team with senior appointments in distribution and operations. Our broad product suite and global distribution platform means we are well placed to meet the long-term needs of an ever increasing number of investors around the world."

On the upside, Aberdeen said its equity portfolios have performed strongly against their respective benchmarks during in first four months of 2016 as investors have begun to focus once again on companies which had previously been undervalued by the market.

Still, this does not mean a dramatic improvement in new business flows is anticipated in the short term, the company said, as many potential investors may need more evidence that this rotation is firmly established before investing.

Aberdeen said on Tuesday that it expects to reduce annual costs by around £70m.