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Europe earnings: HSBC, SocGen boost bank stocks

Credit: Reuters Studio
Published on May 3, 2019 - Duration: 01:31s

Europe earnings: HSBC, SocGen boost bank stocks

Bank stocks boosted Europe's share indices after HSBC beats quarterly profit estimates, bolstered by a surge in income from Asia.

And Société Générale gained as news of a stronger-than-expected capital buffer offset a fall in profits.

David Pollard reports.

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Europe earnings: HSBC, SocGen boost bank stocks

Based in London, HSBC makes most of its money in Asia.

It hasn't always been a winning formula: in February it warned of slowing growth in both the UK and China.

But on Thursday it beat forecasts even so.

A 31 per cent rise in Q1 profit to 6.2 billion dollars boosted its shares in early trading.

Asian revenues were up seven per cent - retail and commercial income rose around ten per cent .... While under its so-called 'positive jaws' strategy favoured by boss John Flint, operating costs are down around 12 per cent.

Like many of its peers, though, its investment banking performance has been losing its bite.

Stock trading revenues tumbled by over a third - the worst equities business performance among major US and European banks.

SocGen's corporate and investment arm, meanwhile, posted a 16 percent decline in profits.

Even as its shares rose on Thursday on signs its restructuring is paying off.

Last month, it announced plans for 1,600 job cuts and asset disposals to free up 10 billion euros in capital.

Q1 net profits are down over a quarter at 705 million dollars ... but investors were cheered by a stronger than expected capital buffer.

As, more broadly, they might be by the latest breakdown on Europe's earnings season so far.

Overall, earnings are still predicted to shrink 4.2 per cent from a year ago.

But - midway through the season - more than half have come in above forecasts.

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