Aug 6, 2018
HSBC profit weighed down by higher expenses
Higher operating expenses continued to bite at HSBC's profitability in the second quarter of the year as the bank stepped up investments in new technology and its expansion in mainland China. HSBC said on Monday that its adjusted operating expenses hit $8.1bn in the three months to June, 7 per cent higher than the same period last year. The higher operating expenses were mainly due to the bank's investments in its retail and investment banking units, part of its latest strategic plan. Joseph Dickerson, analyst at Jefferies, said: "The group net interest margin was flat quarter-on-quarter with higher customer margins offset by higher liquidity and funding costs due to the formation of the non-ring fenced bank which comes as somewhat of a disappointment." Strong quarterly revenue growth in HSBC's retail banking and commercial banking units were accompanied by a more sluggish performance at its investment bank, which suffered sharp falls in fixed income and equity trading revenues, offset by strong growth in foreign exchange trading and cash management.
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