HSBC reports 5% jump in first-half profit helped by cost-cutting

He made the remarks on a conference call after the bank reported an increase in first half profit and announced $2bn share buyback programme.

Mr Gulliver has overseen stringent job cuts and asset sales as part of efforts to boost profits, and on Monday said the bank is on track to achieve around six billion United States dollars cost savings by the end of the year.

Chairman Douglas Flint said that as central bank interest rates edged higher, the bank "began to benefit from improved margins on our core deposit bases". "The revenue we think is at risk from Brexit is about $1 billion, but we don't expect to lose it" because moving staff will protect those businesses affected. The stock buyback plan for 2017 shall raise the amount of total stock it has pledged to buy over the past year to $5.5bn.

The cost-cutting drive appears to be paying off, with operating expenses falling 12% to $16.4bn in the first half of the year, largely thanks to the bank's sale of its operations in Brazil.

In the six months to 30 June, the FTSE 100-listed lender saw pre-tax profits rise 5% year-on-year to $10.2bn (£7.8bn), while net profit for the period rose 10% to $6.99bn.

HSBC could spend up to $300 million moving jobs and parts of its business to Paris following Britain's exit from the European Union, chief executive Stuart Gulliver said yesterday.

Local jobless rates up while state's rate continues to improve
However, overall industry jobs have grown by about 1,100 between June 2016 and June 2017, according to Weaver. The sector that saw the most growth between May and June was leisure and hospitality which added 2,900 jobs.

Since the 2008 credit crunch HSBC has cut thousands of roles and sold assets to ensure it can keep paying dividends and remain profitable.

"We have done this while strengthening one of the most resilient capital ratios in the industry".

The bank has used share buybacks to offset the impact of shares being paid out as dividends.

HSBC profits rose 12 percent in the first half of 2017 as the Chinese-British bank recovered from a previously unstable year. In January, Gulliver said: "We will move in about two years time when Brexit becomes effective".

Reuters noted in its coverage of the news that Gulliver, who is set to step down from the company next year, has said that he could be at HSBC as late as December 2018 if an external candidate is appointed by incoming chairman Mark Tucker.

HSBC won approval last month in China to establish an investment banking joint venture with a state-backed fund, ending a 20-month wait, making it the first such venture in China to be majority-owned by a foreign bank.

  • Ronnie Bowen