HSBC net profits more than double to $6.35bn

Asia-focused bank HSBC said on Tuesday that first-quarter net profits more than doubled to $6.35 billion (4.86 billion euros), aided by sliding bad debts, deep cost cutting and a solid performance in Britain and Hong Kong. Earnings after taxation surged 146 percent in the three months to the end of March, from $2.58 billion in the same part of 2012, the lender said in a results statement. HSBC added it has now slashed a total of $4.0 billion from its annual costs, axing about 46,000 jobs since 2011 as part of a massive restructuring. Underlying pre-tax profits, after stripping out exceptional items, soared 34 percent to $7.6 billion in the first quarter. Revenues rose five percent to $17.6 billion. "We have had a good start to the year, with growth in reported and underlying profit before tax," said chief executive Stuart Gulliver. "While continuing uncertainty in the global economy has created a relatively muted environment for revenue growth, we have increased revenue in key areas including residential mortgages and commercial banking in both our home markets of Hong Kong and the UK, and in our financing and equity capital markets business. "Loan impairment charges were lower in every region, notably in North America," he said, adding that the group was also lifted by its "continued focus on cost management". Bad debts -- consumer loans that have turned sour -- sank 44 percent to $1.17 billion in the reporting period. That compared with $2.09 billion last time around. Gulliver added that cost cutting would continue to be a major focus for the bank, which has sold or closed down more than 50 of its businesses since 2011, including retail networks in Colombia, Russia and Thailand. In Tuesday afternoon deals, HSBC shares rallied 2.89 percent to 734.5 pence on London's FTSE 100 index, which was 0.35 percent higher at 6,544.33 points. "HSBC leads the banking sector higher today, after results that saw a doubling of first-quarter profit," said IG analyst Chris Beauchamp. "Once again the 'world's local bank' is reaping the reward of its focus on emerging markets rather than the moribund European economy, with Chinese growth expected to increase during the rest of this year." Last year, HSBC had posted a 16.5-percent slump in net profits as it was hit by US money-laundering fines, mis-selling scandals, rising taxation and a vast accounting charge.