LONDON â€" The British bank HSBC posted first-quarter earnings on Tuesday that beat analysts’ expectations, on reduced costs and a decline in bad debts.
Earnings rose almost 50 percent, to $8.43 billion, in the first three months of the year, compared to $4.32 billion in the same period a year earlier. Analysts polled by Thomson Reuters had expected an average pretax profit of $8.1 billion.
“We’re moving into calmer waters but there are still challenges ahead,†HSBC’s chief executive, Stuart T. Gulliver, said during a conference call with reporters.
Like other banks, HSBC embarked on a far-reaching cost-reduction program that included job cuts, exiting some unprofitable business areas and selling assets. The bank sold its unit in Panama to Bancolombia for $2.1 billion in February. Last month, HSBC said it would cut about 1,150 jobs at its branches in Britain.
Mr. Gulliver said on Tuesday that he could not exclude further job cuts, as the economies in Britain and the rest of Europe continued to struggle. After a slower-than-expected start to the year, Mr. Gulliver said he expected economic growth in mainland China to gather speed in 2013.
Operating expenses fell 11 percent, to $9.3 billion, in the first quarter from $10.4 billion in the similar quarter last year, HSBC said in a statement. The British bank plans to update investors next week about its strategy and the progress it has made with its cost-reduction program.
Shares of HSBC rose 2.8 percent in London on Tuesday morning.
The bank had to set aside $1.2 billion for bad loans and other credit risks in the first quarter, compared with $2.4 billion in the similar period last year.
HSBC is recovering from a set of blunders that had weighed on its earnings and reputation. Last year, the firm agreed to pay a $1.92 billion fine to settle charges by U.S. authorities that the bank broke money laundering rules. The charges included allegations that HSBC handled money transfers worth billions of dollars for countries under U.S. sanctions. The British bank also has set aside more than $2 billion to compensate customers who were improperly sold some financial products.
