HSBC Plc (HSBC) posted stronger-than-expected first quarter earnings Thursday but indicted it had no plans to either buyback shares or increase its dividend despite its strong capital base.
HSBC said pre-tax profits for the first three months of the year came in at $4.96 billion, a 19% decline from the year-ago period but topping a bank-provided consensus of $4.3 billion. Revenues at the bank, Europe's biggest, fell 13% to $13 billion, HSBC said, firmly ahead of the FactSet consensus of $12.5 billion.
"This is a good set of results. The increase in adjusted profit was driven by strong performances in three of our four global businesses," said CEO Stuart Gulliver. "Global Banking and Markets had a great quarter; Commercial Banking delivered higher revenue from our liquidity and cash management activities; and Retail Banking and Wealth Management was supported by rising interest rates and renewed customer investment appetite."
HSBC said its benchmark tier 1 ratio, a measure of financial strength, rose by 70 basis points from the end of last year to 14.3% -- one of the strongest in Europe -- following the April completion of a $ billion share buyback. However, CFO Iain McKay told CNBC Europe television that the bank was not looking at returning cash to shareholders at the present time and would look to hold its 2017 dividend unchanged at around $0.51 per share.
HSBC shares closed at 642.25 pence each in London Wednesday after rising 0.37% on the session, trimming the year-to-date decline to around 2.23%. Its major European peers, Barclays plc (BCS) and Deutsche Bank DB have fallen 6.55% and 2.5% respectively.