HSBC said today that underlying profits in the first three months of this year were well ahead of a year ago, boosted by a sharp fall in bad debts, especially in the US.
Europe’s biggest bank said its bad debts fell to their lowest level for more than two years and the improvement returned its troubled US business to profit for the first time since the financial crisis began in 2007.
HSBC said its underlying first quarter profit was “comfortably ahead” of both a year ago and the fourth quarter of last year. Its reported pre-tax profits would be lower than a year ago, however, as last year’s figure included a $6.2bn (£4.2bn) technical accounting gain.
Group chief executive, Michael Geoghegan, said: “I am encouraged by our very good financial results in the first quarter and pleased to say that our performance since the end of the quarter has been satisfactory. ... It is too soon to declare victory but the improvement in the quarter is testament to the actions of our management team since we identified the problems in the US consumer finance market.
The bank does not report full quarterly results. Immediately after the announcement HSBC shares jumped 5.4 per cent to 663p.
City A.M. Reporter