’S profits almost doubled in the first three months of the year as its strategy of cutting down on overseas businesses and slashing costs paid off, the bank revealed yesterday.
Pre-tax profits came in at $8.4bn (£5.4bn), up 95 per cent on the year. Loan impairment charges plunged 51 per cent to $1.2bn while revenues increased 14 per cent to $18.4bn.
The improvement comes after the bank shed an additional nine units as part of a simplification drive.
And it cut another 1,000 staff in an efficiency push, though it had to hire another 900 to bolster its risk and compliance functions to cope with new regulations and to improve its anti-money laundering functions.
Overall the bank has cut headcount from 300,000 when Stuart Gulliver became chief executive in 2011 to 254,000 now. And he is expected to announce further job cuts in a shareholder presentation next Wednesday, updating investors on the progress of the bank’s strategic review.
“The industry is moving into calmer waters, but I don’t think it is the time to reduce the vigilance we need to demonstrate running banks,” Gulliver said. “The reason is the Eurozone – we expect its GDP to contract in 2013.”
The strong figures allowed the bank to raise its core tier one capital ratio from 12.3 per cent at the end of 2012 to 12.7 per cent.
And return on average shareholders’ equity increased from 6.4 per cent in the first three months of 2012 to 14.9 per cent in the same period of 2013.