The Banking and Strategy Initiative

Chillin' out till it needs to be funded

Bank Results Season: Taking a look at trading rebound vs commercial banking growth (HSBC Q1 2012)

HSBC’s Net Operating income was up to $18.8 bln before DVA from $17.6 bln last year before DVA spreads squeezed topline. Meanwhile run off portfolo efficiencies in North America down to 3.4% on Cards and 7.1% on non revolving credit loans helped it along after the boost in trading income pushed Q1 PBT to $6.77 bln before DVA and a $4.3 bln reported PBT

SHANGHAI, CHINA - NOVEMBER 02:  (Backrow L to ...

SHANGHAI, CHINA - NOVEMBER 02: (Backrow L to R) Helen Wong (President and CEO, HSBC China), Phil Mickelson of the USA, Tiger Woods of the USA, Martin Kaymer of Germany, Sandy Flockhart (Executive Director, HSBC Holdings), Peter Wong (CEO, HSBC Asia-Pacific) and Lee Westwood of England during the 2010 WGC-HSBC Champions Photocall at The Peninsula hotel on The Bund, Shanghai on November 2, 2010 in Shanghai, China. (Image credit: Getty Images via @daylife)

Revenues in Asia Retail and Wealth came back on a stronger showing in Hongkong increasing core Net interest income for the bank along with Insurance revenues, another “safe haven:” for challenged banking treasuries. Rates and Credit Trading revenues helped it grow revenues by $2.2 bln from Q4. Consumer redress provisions doubled to $460 mln from the previous quarter even as the bank saved on UK levy and halved impairment and restructuring costs to $260 mln in the quarter leaving better cost efficiency ratios suspect even as it closed 10 disparate operations further to its cost savings plan for 2012. Investor Day is on May 17, 2012 even as the bank seems to be a sustainable bet on growth and efficiency despite longer term efficiencies taking time to recover despite 14,000 decrease in FTE over 2011.

The bank has been increasing Transaction Banking/Trade Finance revenue in China and Core Tier I capital ratio of 10.4% would seem to be in for a revamp as the US portfolio runoff completes the tangible cycled effect on increasing profits.

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