The Wall Street Journal said shares in U.K.-headquartered HSBC fell 2.8 percent on the London Stock Exchange after the bank revealed net profits were down year over year, from $3.13 billion in Q1 2017 to $3.09 billion in Q1 2018.
HSBC Chief Executive John Flint pointed to rising costs for the bank, with operating costs up 13 percent due to investments in digital banking and other areas of financial services, the publication said. He spoke with the WSJ and assured that the bank remains on track to increase revenue and cover costs for the full year.
“Given the state of the world at the moment and the opportunities in front of us, there are opportunities to invest in growth,” said Flint. “The fact we’re investing in the business is a sign of strength.”
Despite HSBC’s announcement of $2 billion in buyback plans, investors were unimpressed; analysts at UBS said they had expected $4 billion in buybacks, and HSBC noted that this would likely be its only buyback program this year, reports said.
France’s BNP Paribas, meanwhile, also disappointed with a 17 percent drop in net profits, though reports in Reuters on Friday said this was expected. The bank pointed to a weaker dollar and other factors that have suppressed banking revenues.
BNP Paribas posted $1.9 billion in Q1 net income, in line with analyst expectations polled by Reuters. Revenues declined 4.4 percent, though that performance was better than analysts expected.
“Even if the market context was lackluster in Europe compared to the first quarter 2017, the results are in line with the trajectory of the 2020 plan and the achievement of its targets,” said Chief Executive Jean-Laurent Bonnafé in a statement.
Revenues at its corporate and institution bank also declined, with market volatility and caution among clients resulting in a drop in foreign exchange trading in Europe, reports noted.