HSBC Q1 profit beats estimates even as bad-loan charges double

The HSBC building in Canary Wharf in London on Oct 8, 2008.
The HSBC building in Canary Wharf in London on Oct 8, 2008. PHOTO: REUTERS

LONDON (BLOOMBERG) - HSBC Holdings, Europe's largest bank, reported a bigger profit than analysts forecast even as bad-loan charges surged.

Pretax profit fell to US$6.1 billion from US$7.1 billion a year earlier, the London-based bank said in an exchange filing on Tuesday (May 3). That compared with the US$4.3 billion average estimate of 14 analysts compiled by the lender.

Charges for bad loans doubled to US$1.16 billion, compared with an estimate of US$999 million.

Slowing Chinese growth and low commodity prices previously contributed to an unexpected fourth-quarter loss for HSBC and tempered its plans to redeploy US$100 billion of assets in Asia and hire thousands of staff in the world's second-biggest economy.

Chief executive officer Stuart Gulliver, 57, and chairman Douglas Flint, 60, the longest-serving duo at the helm of a European bank are nearing the end of their terms: Mr Flint is stepping down next year, and his replacement will start the search for a new CEO.

Since 2011, Mr Gulliver has slashed more than 87,000 jobs, exited at least 80 businesses and reduced the bank's sprawling footprint to 71 countries and territories from 88. Alongside most other European banks, the CEO has been struggling to boost profitability in the face of record-low interest rates, misconduct fines and rising regulatory costs.