HSBC profits fall as bank bids to restore flagging revenues

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Bank giant HSBC has reported a 19% fall in profits for the first three months of 2017 as it bids to restore flagging revenues after a restructuring.

But the fall in profits to $5bn (£3.9bn) beat analysts’ forecasts, and HSBC’s shares rose 1.5% in Hong Kong.

The lower profits were due mainly to accounting changes, while the results last year included proceeds from the sale of its Brazilian business.

Chief executive Stuart Gulliver called the figures a “good set of results”.

Revenues for quarter rose to $12.84bn from $12.57bn, while adjusted pre-tax profit – which excludes one-off items – rose to $5.94bn from $5.3bn a year earlier.

The figures are the first since Europe’s largest bank announced the appointment of a new chairman in March. The move was part of a management overhaul that will also see HSBC choose a new chief executive.

Following a big drop in profits in 2015, HSBC embarked on a restructuring that led to thousands of job cuts, branch closures, asset sales, and a bigger focus on Asia.

Cost-cutting ‘on track’

Analyst Jackson Wong, from Huarong International Securities, said the figures showed a marked improvement.

“They cleaned up a lot of bad things in the last quarter of last year so this quarter, everything looks pretty decent, even the cost-cutting is on track,” he said.

Mr Gulliver said in Thursday’s statement that 2017 would see the completion of strategic measures announced in 2015, including the removal of low-return risky assets.

“Our cost-saving programme remains on track to hit the higher cost-saving target we announced at our annual results,” he added.

“Our pivot to Asia continues. We increased advances to customers and grew mortgages and business lending… all three of our North American businesses delivered material increases in profit before tax.”

Briton Mark Tucker, currently group chief executive and president of insurance group AIA, will take over as chairman from Douglas Flint in October.

One of Mr Tucker’s first jobs will be to lead the hunt for a replacement for Mr Gulliver, due to retire in 2018.

Royal honour for high-flying firm

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A booming Wigan firm is celebrating winning the most coveted business prize in the country. For leading manufacturer and supplier of window components,

Thermoseal Group, were proclaimed winner of a Queen’s Award for Enterprise – by Her Majesty herself. The Martland Park-based company triumphed in the 2017 International Trade category and follows other big honours for its exporting prowess at the Wigan Business Awards and the Amazon Growing Business Awards. Following the royal announcement, winners are permitted to fly The Queen’s Awards flags across their UK sites and are invited to offer input into the development and delivery of policies across Whitehall. Winners will be invited to a Buckingham Palace reception and the Lord-Lieutenant of Greater Manchester,

The Queen’s local representative, will later this year present the award in trophy form. Thermoseal MD Gwain Paterson said: “I’m honoured to accept such a great compliment to the business and recognition for all of the efforts of my colleagues in Wigan and at our other UK sites over the past few years. “It is of course, with thanks to our customers and suppliers for their continued support that we have achieved such an esteemed accolade. Since our initial plan to develop the business from primarily UK distribution of imported products to manufacturing our own energy-efficient components – Thermobar and Thermoflex Warm Edge Spacer Systems – in Martland Park, I rarely get time to sit back and look at what a great business we are building and how impressive it is. “We have been focused on setting up production sites and developing our own bespoke equipment and processes, as well as our innovation centre and laboratory facilities, and then upscaling everything to meet the growing demand.“

In addition, we have done all this whilst developing the infrastructure of the National business, up-skilling our current staff and taking on a whole production team. “We have seen steady growth over the past few years, but particularly in the past year we have really started to make an impact on export markets, some of which where our products are already the leading energy-efficient option. “We now manufacture over 50 per cent of the products we supply as opposed to less than five per cent in 2008. In terms of export, we ship from Wigan to over 22 different countries in Europe, USA, South America, Asia, Australia and Oceania. “Growth in export has been significant over the past year and is set to continue in the future. Although I’m not generally the kind of person to blow my own trumpet, our awards successes so far prove that our business is impressive in any industry and my colleagues deserve the recognition for their continued efforts.

“I’d like to say a personal thank you to everyone involved in our successes to date.” Thermoseal is now the UK’s leading supplier and manufacturer of insulated glass components, including spacer bars found in double glazing frames.

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