Canary Wharf-based bank HSBC has reported a 5% rise in pre-tax profits, ahead of expectations.

The bank reported a strong performance across its main divisions as it earned £7.8million in the first six months of the year on revenue that was down 12% at £19.9billion. The bank is investing some of its money in a £1.5billion share buy-back.

Outgoing chairman Douglas Flint gave a positive account of activities across the bank’s range. He said: “Markets-based revenues benefited from market share advances, commercial banking customer activity was robust, wealth management and insurance revenues were notably stronger in Hong Kong, and credit experience globally remained remarkably sound.

“As central bank interest rates edged higher, led by the US, we began to benefit from improved margins on our core deposit bases, providing a welcome enhancement to the group’s revenue mix, given the likely trajectory of interest rates over the medium term.”

The figures signal the beginning of the end of a turbulent period for the bank which has been plunged into a number of financial crises since the credit crunch of 2007/08. The figures come on the back of a restructure overseen by chief executive Stuart Gulliver and has involved job cuts and asset sales.

Stuart Gulliver, group chief executive of HSBC

Mr Gulliver said: “We remain on track to achieve around [£4.5billion] of annualised cost savings by the end of the year, in line with the revised expectations that we set at our annual results.

“In the past 12 months we have paid more in dividends than any other European or American bank and returned [£2.6billion] to shareholders through share buy-backs.

“We have done this while strengthening one of the most resilient capital ratios in the industry,” he added.

Brexit uncertainties

On Brexit, the bank said: “Notwithstanding uncertainties arising from increasing geopolitical tensions and ambiguous predictions around the shape of transition to, and final form of, the UK’s future relationship with its major trading partners in the EU, customer activity across all business segments was resilient.”

HSBC is one of a number of banks considering relocating jobs to the continent after the Brexit vote earmarking 1,000 jobs that may move to Paris to maintain “passporting” rights.

Mr Flint described Britain’s Brexit negotiations as “complex and time-consuming”.

He said: “The essential questions that have to be addressed are whether, at the conclusion of the negotiations, the economies of Europe will continue to have access to at least the same amount of financing capacity and related risk management services, and as readily available and similarly priced, as they have enjoyed with the UK as part of the EU.”

PPI penalty

Wharf bank Barclays announced last week it was setting aside £700million for missold PPIs. HSBC said it was sequestering another £228million for the same purpose.

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