HSBC has posted a 14% drop in profits for Q1 of 2016 following “extreme levels of volatility” in financial markets at the start of the year.
The banking giant’s profit before tax came in at $6.1 billion for Q1, down from $7.1 billion a year ago.
However, analysts had expected a far steeper fall in profits.
HSBC CEO Stuart Gulliver said the bank had been “resilient in tough market conditions”.
Adjusted pre-tax profits, including currency effects and one-off items, fell 18% to $5.4 billion.
HSBC cut almost a thousand jobs worldwide in Q1, leaving it with 254,212 full-time staff across 71 countries and territories.
Stuart Gulliver said HSBC was confident of hitting its $5 billion cost-cutting target by the end of 2017.
HSBC’s adjusted revenue for Q1 amounted to $13.9 billion, a 4% drop from the same time last year.
The bank also said the development of its Asian business was gaining momentum, “despite a challenging environment with key increases in market share in debt capital markets, China M&A and syndicated lending”.
Ahead of the results, analysts had warned HSBC might signal an end to its highly-valued progressive dividend, which delivers ever-increasing payouts.
However, HSBC maintained the progressive target and left its dividend unchanged from the same period last year at $0.10.
HSBC also announced that the $5.2 billion sale of its Brazil unit to banking giant Banco Bradesco received preliminary approval from competition regulators.
The leaked Panama Papers have revealed that international banking giants are helping clients to avoid tax by using complicated offshore arrangements.
HSBC, Credit Suisse and the Royal Bank of Scotland-owned Coutts Trustees have denied allegations.
The revelations in are based on more than 11 million documents leaked from the law firm Mossack Fonseca.
They name lenders said to have helped to set up structures making it hard for tax officials to pinpoint money flows.
They also name institutions alleged to have helped companies that were subject to international sanctions.
Rami Makhlouf is the cousin of Syria’s President Bashar al-Assad and has reported wealth of $5 billion.
In 2008 the US Treasury imposed sanctions on him because it deemed him to be a “regime insider” and someone who “manipulated the Syrian judicial system and used Syrian intelligence officials to intimidate his business rivals”.
Mossack Fonseca continued to front six businesses – including one company called Drex Technologies – for Rami Makhlouf after the restrictions were put in place.
The files also show the Swiss branch of HSBC provided financial services for the company.
In 2010, two years after the sanctions were imposed, HSBC wrote to Mossack Fonseca saying it believed Drex Technologies was a company of “good standing”.
An internal email from Mossack Fonseca’s compliance department also suggests HSBC staff dealing with Drex Technologies knew who Rami Makhlouf was.
The email, dated February 17, 2011, says: “We have contacted HSBC who stated that they are very aware of the fact that Mr. Makhlouf is the cousin of the President of Syria.
“The HSBC compliance department of the bank not only in Geneva but also in their headquarters in London know about Mr. Makhlouf and confirm that they are comfortable with him.”
In response HSBC said: “We work closely with the authorities to fight financial crime and implement sanctions.
“Our policy is clear that offshore accounts can only remain open either where clients have been thoroughly vetted (including due diligence, ‘Know Your Customer’, source of wealth, and tax transparency checks), where authorities ask us to maintain an account for the purposes of monitoring activity, or where an account has been frozen based on sanctions obligations.”
The Panama leaks has revealed that more than 500 banks, including their subsidiaries and branches, registered nearly 15,600 shell companies with Mossack Fonseca.
Credit Suisse chief executive Tidjane Thiam said: “We do not condone structures for tax avoidance. Whenever there is a structure with a third party beneficiary we insist to know the identity of that beneficiary.”
Tidjane Thiam added: “We as a company, as a bank only encourage the use of structures when there is a legitimate economic purpose.”
A spokesman for Coutts Trustees said the bank followed the highest standards when complying with regulation.
He added: “We require all clients to be tax compliant as a condition of receiving our products and services and take a risk-based approach to identify and prevent tax evasion that relies upon extensive anti-money laundering systems and controls, including the requirement to understand the source of clients’ wealth.
“The provision of trust and administration services is an entirely legitimate and key aspect of wealth management and succession planning.”
Standard Chartered bank is to cut 15,000 jobs and raise $5.1 billion to create a “lean, focused and well-capitalized” group.
About $3 billion being raised in the rights issue will cover reorganization costs.
The remainder will be used to strengthen the bank’s balance sheet.
The restructuring was announced as Standard Chartered reported a “disappointing” pre-tax loss of $139 million in Q3 of 2015.
That compared with a profit of $1.5 billion for the same period of 2014.
Revenue fell 18.4% to $3.68 billion and losses on bad loans almost doubled to $1.23 billion for Q3 of 2015.
The job cuts are part of a restructuring program to take place over the next three years.
Standard Chartered gave few details about the staff reductions, but the figure could include businesses it plans to sell. It employs 86,000 people.
Bill Winters announced a strategic review of Standard Chartered when he took over as chief executive in June.
He put a new management team in place the following month and analysts had been expecting the bank to seek additional capital to shore up its balance sheet.
Bill Winters acknowledged the challenging business environment facing the bank.
“This is … an aggressive and decisive set of actions to fundamentally shore up the underpinnings of the bank,” he said on a conference call.
Standard Chartered shares fell more than 6% in early trading in London and by 3.2% in Hong Kong.
The bank has already shed some businesses, in Hong Kong, China and Korea, to help improve its capital position.
Among the plans announced on November 3, Standard Chartered said it would invest more than $1 billion to reposition its retail banking, private banking and wealth management businesses, as well as upgrade its Africa franchise and yuan services.
The rights issue had the backing of Temasek, Singapore’s state investment company and Standard Chartered’s largest shareholder.
Hugh Young, managing director at Aberdeen Asset Management, the bank’s second-biggest shareholder, said: “[There is] still a lot of hard work to put in but the path is clear.”
The rights issue, Standard Chartered’s first since 2010, will be launched on November 3 at a price of 465p a share – a 35% discount to its closing price on November 2. Two new shares will be issued for every seven existing shares.
Standard Chartered has also axed the final dividend for 2015 to conserve cash.
Germany’s biggest bank, Deutsche Bank, has announced a 15,000 job cuts after a €6 billion loss in Q3 of 2015.
The bank said it would cut 9,000 full-time jobs and 6,000 contractor roles.
Deutsche Bank is also planning to sell businesses employing 20,000 people over the next two years.
By 2018, “we expect to see the benefits of our hard work and potentially be in the midst of a powerful turn-around,” said John Cryan, co-chief executive.
The cuts represent just less than 15% of the firm’s total workforce.
Deutsche Bank’s shares fell 5.5% in Frankfurt trading on October 29.
The bank is trying to cut €3.8 billion of annual costs as European banks struggle with sluggish economic growth in their home markets and stricter regulation.
In times of low growth, reducing costs through job cuts is seen as a way to improve profits.
Deutsche Bank also plans to spin off Postbank with a stock market listing and sell its 20% stake in China’s Hua Xia Bank.
It has also said it will stop dividend payments for 2015 and 2016.
John Cryan told a news conference that the bank faced “hard decisions” as it was restructured.
“We must reduce Deutsche Bank’s complexity,” he added.
Deutsche Bank said it would close businesses in Malta, Argentina, Chile, Mexico, Finland, Peru, Uruguay, Denmark, Norway, and New Zealand. Some branches in Germany would close as well, John Cryan said.
The third-quarter loss was caused by more than €5.8 billion of charges in write downs and legal expenses at its investment bank and on assets it wants to sell, as well as higher litigation charges.
Of the 9,000 full-time job cuts, about 4,000 will take place in Germany.
Deutsche Bank employed 98,000 people as of the end of 2014, according to its annual report.
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