HSBC Flags UK Over Brexit Uncertainty

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A top executive of HSBC has called for a swift solution to Brexit. In an interview with Sky News, he said that the uncertainty is affecting business and consumer confidence.

Talking in the Ian King Live programme, the Ewen Stevenson, the chief financial officer of the banking giant, said that the United Kingdom was on a list of world markets that HSBC was concerned about.

His remarks came as the global lender reported a 31 percent increase in profits in the first quarter of the year, despite counting the cost of economic uncertainty in the United Kingdom.

Profit before tax at the London-based banking group increased above expectations to $6.2 billion in the period between January to March, a rise from the $4.8 billion for the same period in 2018.

The company, in its stock market filing, revealed that it had raised its provision for bad loans in its commercial banking business, putting aside $200 million, mainly due to a small number of UK clients and the current economic uncertainty that is fuelled by the Brexit turmoil.

It came after Lloyds Banking Group reported flat profits for the beginning of the year and warned that continuing instability could take a further toll on the economy of the United Kingdom.

Stevenson told Ian King: “Overall, if we look around the world and talk about markets we are concerned about the UK is certainly on that list.”

He added: “Brexit uncertainty is creating weakness both in business confidence and consumer confidence and we have seen for some time corporate activity and personal activity slow down.”

He continued: “As soon as we can get to a solution on Brexit and get confidence restored the better I think for the economy.”

Alongside its increased profits, HSBC reported that its operating expenses plunged by 12 percent over the quarter.

Talking about the results, John Flint, the HSBC chief executive, stated: “These are an encouraging set of results, particularly in the context of heightened economic uncertainty globally.”

“We remain focused on executing the strategy we outlined last June, while also being alert to risks in the global economy.”