HSBC Group has seen a 20 per cent fall in its quarterly profits over the past year.
The bank’s pre-tax profit for Q1 was £3.9bn, down from £4.9bn in the same period last year.
The bank’s revenue in Q1 of this year was £630m higher than in the first three months of 2013, partly because of a net gain from the sale of Chinese insurance company Ping An and foreign exchange gains on sterling debt issued by the bank.
Gulliver says HSBC’s retail banking and wealth management division was hit by lower revenues and changes to incentive plans within the bank. Despite this the division’s pre-tax profit rose from £900m in Q1 of 2013 to £1bn in QI this year.
The amount the bank paid out in compensation for missold payment protection insurance fell from £66.5m in Q1 of 2013 to £48m in the first three months of this year.
In the bank’s annual results, published in February, HSBC revealed it had set aside a total of £1.2bn to pay redress to UK customers, including £89.5m for unsuitable investment advice through its wealth management arm.
HSBC chief executive Stuart Gulliver says: “In the first quarter we maintained control of costs and further demonstrated our capital resilience. Whilst revenue was lower than the previous year’s first quarter, which benefited from a number of specific items, we have seen progress in revenue over the trailing quarters. Loan impairment charges fell, reflecting the changes to the portfolio since 2011.”