HSBC Misses Q1 Profit Estimate

HSBC Holdings posted on Friday an unexpected 4% drop in first-quarter pre-tax profit due to a surge in investments, missing estimates, and announced plans to initiate a new share buyback of up to $2 billion, Reuters reported. “Given the growth opportunities we currently see, we expect this to be the only share buyback that we announce in 2018,” Europe’s biggest bank by assets said, adding the process was expected to start shortly. The bank’s pre-tax profit of $4.76 billion for the three months ended March 31 compared to $4.96 billion in the year-ago period. The profit in the latest quarter was below the $5.76 billion average of analysts’ estimates compiled by the bank. The bank’s profit shrank mainly as a nearly 13% rise in operating expenses outpaced revenue growth of 5.5%. HSBC said the rise in costs was due to investment in its retail banking businesses in its core markets of Britain and China. “We also made strategic hires in our securities joint venture in mainland China, and invested to enhance our digital capabilities in all our global businesses,” said Chief Executive John Flint in a statement.