Wealth Manager - the site for professional investment managers

Register free for our breaking news email alerts with analysis and cutting edge commentary from our award winning team. Registration only takes a minute.

HSBC profit falls 12% in grapple with 'unprecedented' regulatory pressure

1 Comment
HSBC profit falls 12% in grapple with 'unprecedented' regulatory pressure

HSBC’s profits fell by 12% in the first half as the bank grappled with ‘unprecedented’ and ‘inconsistent’ regulatory demands across multiple jurisdictions.

Pre-tax profits of $12.56 million (£7.46 million) over the six months to the end of June were down from $14.07 million in the same period last year. Much of the fall was attributed to the effect of asset disposals in the first quarter of 2013 distorting the figures.

Chairman Douglas Flint branded the results ‘well-balanced’ and laid bare the regulatory pressures the bank is facing.

‘The demands now being placed on the human capital of the firm and on our operational and systems capabilities are unprecedented.

'The cumulative workload arising from a regulatory reform programme that is unfortunately increasingly fragmented, often extra-territorial, still evolving and still adding definition is hugely consumptive of resources that would otherwise be customer facing,’ he said.

‘Add to this recent obligations to perform highly granular multiple stress tests which are inconsistent in definition and scenarios between major jurisdictions and so require considerable duplication of effort; recently announced significant wholesale market practice and competition reviews in the UK.

He added: '[re-organising] the financial, operational and structural framework of the group to respond to evolving thinking on cross-border resolution protocols; and, finally, planning what will be a multi-year project to separate and establish the ring-fenced bank in the UK, and the dimension of the execution risk is obvious.’

Flint highlighted that heightened geopolitical tensions and concerns about slowing economic growth in many major markets mean this is ‘not the time to expand risk appetite to offset the effect of lower revenues arising from business disposals and legacy portfolio run-off’.

The private bank bucked the trend, however, positing profits of $364 million, more than treble the $108 recorded in the same period last year.

Leave a comment!

Please sign in or register to comment. It is free to register and only takes a minute or two.
Citywire TV
Play Boutique tapes: my business will never be sold

Boutique tapes: my business will never be sold

In the final part of our four part series we discuss consolidation and whether it's getting tougher for boutiques to survive.

Play Boutique tapes: are top managers better off at small firms?

Boutique tapes: are top managers better off at small firms?

In episode three of our series, boutique bosses discuss whether the best fund managers are more likely to thrive at smaller firms.

Play Boutique tapes: if you want a Ferrari, you have to pay for it

Boutique tapes: if you want a Ferrari, you have to pay for it

In the second part of our four-part series, boutique bosses are asked how they can justify the fees charged by active managers.

Read More
Your Business: Cover Star Club

Profile: how this boutique beat the big guns of wealth

Profile: how this boutique beat the big guns of wealth

This small west country offshoot of a local IFA scooped a 2018 Citywire award from beneath the noses of the national challengers

Wealth Manager on Twitter