SINGAPORE/LONDON : HSBC's profit fell by less than expected in the first-quarter but Europe's biggest bank warned that more share buybacks were unlikely this year as rising inflation and economic weakness had dented its prospects.
HSBC, which has market value of $130 billion, posted a pretax profit of $4.17 billion for the first quarter ending on March 31, down from $5.78 billion a year earlier. In February, HSBC brought forward its key profitability target by a year and more than doubled its annual profit as expected bad loans from the pandemic failed to materialise.The lender dealt a blow to shareholders by saying further share buybacks, which it has used in recent years as a way of returning excess capital to investors, would be unlikely this year. It blamed volatility in the value of some investments it holds as hedges against dips in interest income.
The bank said expected credit losses came in at $600 million in the first quarter. In the same period last year it unlocked $400 million of reserves as the outlook improved. HSBC ranks as one of Europe's largest banks along with BNP Paribas with total assets of $2.9 trillion as of last year.
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