HSBC registers Global Foreign Exchange revenue growth in Q1 2022
HSBC Holdings plc (LON:HSBA) has just posted its financial report for the first three months of 2022, with Global FX seeing an increase in revenues.
In Global Foreign Exchange, HSBC reported revenue growth of $0.1bn or 15% for the quarter. The rise was due to a strong trading performance driven by market-wide volatility and strong client activity.
The Global Banking and Markets segment registered adjusted profit before tax of $1.2bn, $0.7bn or 35% lower than in 1Q21. This was driven by a net ECL charge in 1Q22, compared with a net release in 1Q21, and lower adjusted revenue. Adjusted operating expenses were stable compared with 1Q21.
Adjusted revenue of $4.0bn was $0.2bn or 4% lower than in 1Q21. In Principal Investments, revenue fell by $0.1bn, as 1Q22 included lower revaluation gains compared with 1Q21. In Equities, higher volatility resulted in higher revenue in the context of a strong 1Q21.
In Securities Services, revenue grew by $48m or 11% from higher net interest income, as global interest rates rose. Fee income fell due to lower transaction volumes, although this was in part mitigated by higher fees linked to assets under custody, which grew on an average basis by 7%.
Across all segments, reported profit after tax was down $1.1bn to $3.4bn and reported profit before tax was down $1.6bn to $4.2bn. The decrease reflected a net charge for expected credit losses and other credit impairment charges (‘ECL’) in 1Q22, compared with a net release in 1Q21, as well as lower revenue. Adjusted profit before tax was down $1.6bn to $4.7bn.
All regions continued to be profitable. In 1Q22, HSBC’s Asia operations contributed $2.8bn to Group reported profit before tax, and HSBC UK contributed $1.2bn.
Reported revenue was down 4% to $12.5bn, primarily in Wealth and Personal Banking (‘WPB’), reflecting unfavourable market impacts in life insurance manufacturing and lower investment distribution revenue in Hong Kong, as well as lower Global Debt Markets and Principal Investments revenue in Global Banking and Markets (‘GBM‘).
The share buy-back of up to $2bn announced at our third quarter 2021 results concluded on 20 April 2022, resulting in $2.0bn being purchased and cancelled. HSBC intends to initiate the further share buy-back of up to $1bn, announced at its full year 2021 results, after its annual general meeting on 29 April 2022.