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Tuesday, May 8, 2012 10:15 AM UTC

Tax hit weighs on HSBC’s Q1 profit

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Topics: From the Wires,

LONDON (AP) — HSBC Holdings PLC saw its first-quarter net profits fall by 38 percent after a larger tax bill and higher insurance claims and liabilities.

For the three months to March 31, HSBC reported Tuesday a net profit of $2.58 billion for the period, down from $4.15 billion a year earlier. Operating income was flat at $20.44 billion.

The bank said its tax bill rose from $491 million a year ago to $1.39 billion in the first quarter, and insurance claims and liabilities increased by $836 million.

Gary Greenwood, analyst at Shore Capital, said the bank had reported “a pretty decent set of numbers” with a strong recovery in global banking and markets, a reduction in its underlying cost/income ratio and a cut in impairments from $3 billion to $2.4 billion.

HSBC shares were up 1 percent at 561 pence following the release of the report, which was better than expected.

“We continued to make good progress in implementing our strategy, with 11 transactions to dispose of or close businesses announced since the start of 2012, and we continued to position the business for growth with increased revenues in Hong Kong, Latin America and rest of Asia-Pacific against the previous quarter,” Chief Executive Stuart Gulliver said.

The number of full-time equivalent employees at the end of the quarter was 285,000, down 3,500 from the previous quarter, the bank said.

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Gripping photos: The people of the Turkey protests (slideshow)

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  • The protests take on a festive element as police forces move out of the park and square. Wearing a gas mask, this young man dances to traditional Turkish music in front of Taksim Square’s Ataturk Monument.

  • In Gezi Park since March 31st, this protester, originally caught off-guard by the Government’s teargas and water cannons, went out and bought a Russian army mask from WWII, preparing for what was to come.

  • This rambunctious boy seems to be enjoying the chaos. After taking this picture he threw a stone at the already destroyed building in the background.

  • Forming a line, the police face off directly with protesters in Taksim Square. After a while, they retreated and there was a general cheer – a back-and-forth dance that has been common since the beginning of this protest.

  • An elderly woman in Gezi Park reads the news. The tent community occupying the park was violently destroyed on June 16th.

  • Many different groups had set up booths to promote their cause in Taksim Square and Gezi Park. Standing in front of one, this man waves his flag while posing with conviction.

  • Many home-remedies are used to minimize the effects of tear gas. This woman has put a milky solution on her face, removing her mask after the tear gas dissipated. Before sunrise, the police came again for another round of teargasing.

  • People capitalize on the uprising -- selling flags, beer, gas masks, sky lanterns and spray paint to name just a few of the popular items.

  • On Monday morning, June 11, the police execute a strong offensive. Many plain-clothed police officers, like the ones seen here, clash with protesters in the side streets away from the main stand-off in Taksim.

  • The authorities seem to be most aggressive in the night, pushing protesters away from the square and park. After being teargassed this young woman catches her breath with other protesters on Siraselviler Street.

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