HSBC has boosted its profits as it pushes ahead with the strategy put in place by new chief executive John Flint.
The lender has reported pre-tax profit of 10.7 billion US dollars (£8.2 billion) for the half-year ended June 30, up from 10.2 billion US dollars (£7.9 billion) for the same period in 2017.
Adjusted pre-tax profits fell from 12.4 billion US dollars (£9.6 billion) to 12.1 billion US dollars (£9.3 billion), which HSBC said was due to hiring more staff and expanding its digital network.
The bank’s revenue for the period was 27.3 billion US dollars (£21 billion), up 4.2% year on year from 26.2 billion US dollars (£20.2 billion).
Russ Mould, investment director at AJ Bell, said the rise in revenue was “disappointing”, given HSBC’s presence in fast-growing Asian markets.
Operating expenses grew by 1.1 billion US dollars (£850 million) or 7% to 17.5 billion US dollars (£13.5 billion).
David Madden, market analyst at CMC Markets, said: “HSBC derive the bulk of their money in the far east, and the bank is enhancing technology at its retail operations in China.
“Beefing up technology could may well be a short-term loss, and a long-term gain.”
In morning trading, HSBC’s share price was down 0.8% at 710p.
Graham Spooner, investment research analyst at The Share Centre, said: “Strong quarterly revenue growth in HSBC’s wealth management, retail banking and commercial banking units were assisted by the trend to higher interest rates, while its investment bank suffered a more sluggish performance.”
HSBC also announced that Jonathan Symonds, who is currently chairman of HSBC Bank, will become deputy group chairman of HSBC Holdings.
Mr Flint, HSBC’s group chief executive, said: “HSBC is a strong business with a number of clear commercial advantages.
“In particular, we are a leading international bank with a network that gives us unparalleled access to high-growth markets, particularly in Asia and the Middle East.”
HSBC said in June that it was aiming to simplify its business, while also investing billions in technology under Mr Flint, who was appointed chief executive earlier this year.
The lender released an eight-point plan, saying it will look to boost growth across its Asia business, complete the ring-fencing of its UK bank, boost its share of the mortgage market and improve customer service.
Mark Tucker, HSBC’s group chairman, said: “We have created a strategy that builds on past achievements to improve the group’s competitiveness and increase value for shareholders.
“It focuses on areas where HSBC is already strong, but which also hold the greatest capacity for revenue growth and value creation.”
Jasper Lawler, head of research at London Capital Group, said the results from HSBC, Europe’s biggest bank, made for a positive start to the week for European markets.