The top line numbers reported by HSBC in its 2017 interim report were healthy especially in Asia, however its wealth management business failed to keep pace.
HSBC’s adjusted pre-tax profit for the first half of 2017 was $12 billion, up 12 percent and beating analysts opinions. Global Private Banking though was a laggard.
Net new money of $1 billion at HSBC's Global Private Banking was driven by positive inflows of $8 billion in key markets targeted for growth, mainly in Hong Kong.
Revenue Drops
This was partly offset by outflows resulting from the «repositioning of the business». These repositioning actions are now largely complete according to the London headquartered bank.
Adjusted profit before tax of $143 million was $39 million or 21 percent lower as revenue decreased, partly offset by a reduction in costs.
Adjusted revenue of $846 million was $48 million or 5 percent lower, reflecting the continued impact of what HSBC calls «client repositioning».
Asia Supports
Revenue from markets targeted for growth increased by 9 percent, mainly in Hong Kong, reflecting higher investment revenue and wider deposit spreads. Adjusted operating expenses of $702m were $20m or 3 percent lower, mainly as a result of the managed reduction in headcount and the impact of cost-saving initiatives.
«We have had an excellent first half of 2017, our three main global businesses performed well, increasing profit before tax and growing market share in many of the products that are central to our strategy. We remain on track to complete the majority of our strategic actions by the end of the year,» said Stuart Gulliver, Group CEO.
Legal Issues
The bank still has numerous ongoing legal proceedings and regulatory matters in a number of jurisdictions including in the U.S. Luxembourg.
It has also received enquiries from the Department of Justice regarding its banking relationships with certain individuals and entities that are or may be associated with the world's football authority FIFA.
