HSBC enjoys 'very good' start to 2010

7th May 2010 09:44

HSBC raced to the top of the FTSE 100 after saying it had a 'very good' start to 2010 that was well ahead of the same quarter the previous year.The bank's personal financial services and commercial banking divisions accounted for most of the improvement, HSBC said, with the global banking and markets division also ahead.The US seasonal credit division posted its first pre-tax profit for the first time since the financial crisis began in 2007.Low interest rates in most major markets resulted in constrained deposit spreads, the bank said. With no immediate end to the low interest rate environment in sight - in the UK and the US in particular - income is likely to be restrained for the rest of the year and beyond, said chief executive Michael Geoghegan, pointing out that HSBC is a deposit-led bank. The situation is better in other markets though.'While customer appetite remained subdued in many developed markets, demand for credit picked up in emerging markets and for cross-border trade,' HSBC said.HSBC has been taking advantage of the strong performance in Asia to increase its exposure to the region.'We expect the upturn in demand for credit in emerging markets to translate into revenue growth over time as Asian economies drive the global recovery and as emerging markets begin to play a greater role in world trade,' the bank said.In the UK, HSBC observed that economic progress was modest in the first quarter and that demand for credit remained low, though retail revenues were higher than in the first quarter of 2009.'I am encouraged by our very good financial results in the first quarter and pleased to say that our performance since the end of the quarter has been satisfactory,' said chief executive Michael Geoghegan. 'Although we remain alert to the impact of strains being seen in Europe, the emerging market trends are developing well and it is good to be able to report a pre-tax profit in the US in the first quarter - the first quarterly profit since 2007.'