HSBC's first-quarter profit fell 28% as the Ukraine war pushed up bad debt charges, wealth and personal banking revenue was affected by Covid-19 and the bank warned on the outlook for share buybacks.
Pretax profit fell to $4.2bn in the three months to the end of March from $5.8bn a year earlier as revenue fell 4% to $12.5bn. Analysts had on average expected $3.7bn profit and $12.7bn revenue.
The FTSE 100 bank took a $0.6bn charge for estimated credit losses (ECL) compared with a $0.4bn release a year earlier. Revenue was affected by lower wealth and personal banking income in Asia.
HSBC said it would stick to a planned share buyback of up to $1bn but that further share purchases were unlikely in 2022. It said volatility in equity from financial instruments held for hedging could cause its key capital ratio to drop below its target.
The common equity tier 1 capital ratio dipped 1.7 percentage point to 14.1% in the first quarter. HSBC said the planned disposal of its French retail banking business would also reduce the ratio in the second half.
Noel Quinn, HSBC's chief executive, said: "I'm encouraged by our start to the year. Our strategy is on track, with organic growth and good momentum across most parts of the group.
"While profits were down on last year's first quarter due to market impacts on wealth revenue and a more normalised level of ECL, higher lending across all businesses and regions, and good business growth in personal banking, insurance and trade finance bode well for future quarters."
By: Sean Farrell (ShareCast).
Image: Computer Weekly.
Broadcast: FM.