Profit was up but the shares were down at HSBC. That is because Europe’s biggest bank posted slower than expected earnings growth and a twelve percent drop in revenue.
Profit did rise 10 percent in the first half of the year as HSBC’s three-year cost-cutting plan started to show results.
That includes laying off thousands of staff and selling or closing some businesses
But revenue was worse that analysts had predicted, reflecting a slowdown in growth in emerging markets. The bank highlighted mainland China and Latin America.
It also said growth remains “subdued” in western economies.
HSBC Chief Executive Stuart Gulliver is two and a half years into a restructuring plan and has sold, or exited, 54 businesses. He has cut $4.1 billion (3.09 billion euros) in annual costs and is making progress on returns.
But some analysts said growth will be a challenge given a tough global economy and tighter regulations.
“For all the worthy progress in terms of strategic repositioning … weak revenues driven by anaemic loan growth and a declining margin constrain financial progress and returns,” said Ian Gordon, analyst at Investec.