HSBC profit drops as costs rise

City A.M. Reporter
HSBC said profits fell 14 per cent from a year ago as a jump in costs offset a fall in bad debts at Europe's biggest bank.

HSBC said it would also take a £268m provision to compensate customers who were wrongly sold insurance after banks scrapped a legal fight on the issue.

That helped lift the ratio of costs to revenue to 60.9 per cent from 55 per cent in the previous quarter.

HSBC said it made a pre-tax profit of £2.9bn in the first quarter, down from £3.4bn a year ago.

The update came two days before the bank's new boss Stuart Gulliver unveils a radical shake-up, expected to outline dramatic cost-cutting, a pull back from some of its 87 countries and possibly the sale of its U.S. credit-card business.