HSBC profits up as bank considers HQ move

Boss says HQ review will be an objective look at facts.

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By :  ,  Financial Analyst

HSBC has posted first-quarter results, showing a four per cent rise in pretax profit.

As Europe's biggest bank, the firm beat forecasts and saw investment banking revenue bounce back, offsetting an increase in compliance and regulation costs.

The bank's trading desks also benefited from increased market volatility at the start of the year. Reuters reports this helped the company experience a rise in underlying revenue.

Despite expectations for a drop in earnings for the period, pretax profit for the bank was $7.1 billion (£4.69 billion). Shares were down almost one per cent in the morning trade, in contrast to the overall European banking sector, which was up one per cent.

Recently, the British Financial Conduct Authority asked HSBC for information about its Swiss private bank. The firm has admitted that in the past the private bank fell short of standards and it is facing allegations of helping thousands of rich customers dodge taxes. However, HSBC reports the scandal has not caused any problems for its bottom line.

Chief executive Stuart Gulliver said that the scandal has "undoubtedly done reputational damage to the firm and affected [employees'] sense of pride in the firm". However, he also says it hasn't had an impact on the company's private banking performance.

"It hasn't actually resulted in any significant decrease in business. We haven't seen in any of the business segments a significant change of business," he explained.

Speculation has also been rife regarding the company possibly moving its headquarters out of the UK.

"It's going to take us a few months, not years [to make a decision]," Mr Gulliver said. The review comes after plans in the government's annual budget included an increase in the bank levy from 0.156 per cent to 0.21 per cent.

If the headquarters were relocated, the bank says around 250 jobs out of the 48,000 UK-based staff would be transferred.

Further details about the possible change in headquarters, and the methodology the company will use in its decision making process may be available on June 9th, reports the BBC.

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