HSBC profit beats estimates as CEO reins in cost increases

John Flint. (Bloomberg pic) 

HONG KONG: HSBC Holdings Plc’s first-quarter profit beat estimates, as chief executive officer John Flint made headway in bringing costs under control.

Adjusted pretax profit was US$6.35 billion, versus the US$5.69 billion consensus estimate of 16 analysts compiled by the bank. Revenue rose 9% to US$14.41 billion, ahead of a consensus estimate of US$13.9 billion.

Revenue gains outpaced cost increases in the first three months of the year, the bank said, a trend HSBC refers to as positive jaws. Adjusted operating expenses rose 3.2% in the quarter compared with 5.6% in the same period last year.

Europe’s biggest lender has faced questions over its strategy since it failed to deliver on a pledge to deliver positive jaws in 2018.

The London-based bank elevated Flint last year to replace Stuart Gulliver, bringing to an end a seven-year term marked by asset sales, job cuts and a pivot toward Asia.

Since Flint took over in February of last year, the shares are down about 10%.

After announcing in February that HSBC would be slowing the pace of investment, Flint expressed further frustration in March – berating about 400 executives about “incompetence” and their inability to keep a rein on expenses, people familiar with the matter have said.