The share price of HSBC (LSE: HSBA) (NYSE: HSBC.US) is currently down over 1% following publication of an interim management statement for the first quarter of 2014. Reported pre-tax profit was down 20%, to $6,785m, and underlying pre-tax profit was down 13%, to $6,621m, compared with the same quarter last year.
Underlying revenue in Q1 2014 was down 8% versus Q1 2013, at $15,709m. The bank says that this mainly reflects “the reduced impact from significant items of $1,076m“. Excluding those, revenue was only 2% lower than in Q1 2013.
HSBC says that it has made “further progress” in its current strategy, making gains in market share in several product categories in its “Global Banking and Markets” business, including equity and debt capital markets, advisory and lending. It also reported that it had achieved positive net new money in the areas of its Global Private Banking operations that it was targeting for growth.
Earnings per share for Q1 2014 were down 20%, at 27 cents (compared with 34 cents in Q1 2013), but the first quarter dividend was maintained at 10 cents per share.
Commenting on the statement, group chief executive Stuart Gulliver said:
“In the first quarter we maintained control of costs and further demonstrated our capital resilience. Whilst revenue was lower than the previous year’s first quarter, which benefited from a number of specific items, we have seen progress in revenue over the trailing quarters. Loan impairment charges fell, reflecting the changes to the portfolio since 2011. Our return on equity was 11.7%.
“Global Banking and Markets had a relatively good performance and we grew our market share in several product categories. Commercial Banking saw revenue growth but, in our Principal Retail Banking and Wealth Management business, revenues were impacted by changes in incentive plans and product pricing.“
At 597.7p, HSBC’s share price is down 18.5% on this time last year, a period in which the FTSE 100 has risen 3.3%. And over five years, HSBC’s share price has only increased by 24.4%, compared with the FTSE’s 60% gain.
