Five questions answered on HSBC’s profit rise

How did they do it?

HSBC bank has reported a rise in profits for the first half of the year despite a drop in revenue. We answer five questions on HSBC’s figures for the first half of the year.

By how much has HSBC’s pre-tax profit risen by?

The bank’s pre-tax profit is up by 10 per cent to $14.1bn (£9.2bn). This is despite a 7 per cent drop in revenues to just under $35bn.

How has HSBC achieved these figures?

I has it has achieved this by streamlining its business and cutting operational costs by 13 per cent, as we as selling off non-core businesses and lower bad debts.

The bank said it had closed or sold 11 non-core businesses since the start of the year.

It also cut 46,000 jobs in May and plans to reduce its number of employees to between 240,000 and 250,000 over the next three years.

What has the company said about its latest figures?

"We have successfully progressed the repositioning of the business," chief executive Stuart Gulliver is quoted by the BBC as saying.

"These results confirm the value which is being delivered from the continuing reshaping of the group and enforcing appropriate cost discipline," he added.

Are the latest figures in line with expert’s expectations?

They are slightly below analysts expectations. HSBC’s shares, which have risen by over 40% in the past year, fell 3 per cent when the results were announced. 

Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, speaking to the BBC said the key results were "strong or improving".

"The statement is safe and dependable, as is the current aspiration of banking investors."

What else has the bank said about its future plans?

The bank is planning on streamlining its operations further by focusing on high growth markets in Asia.

HSBC makes an estimated 90 per cent of its profits outside the UK.

HSBC's pre-tax profits have risen by 10 percent despite a 7 per cent drop in revenues. Photograph: Getty Images.

Heidi Vella is a features writer for Nridigital.com

Photo: Getty
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Shock Wales YouGov poll shows that Labour's Ukip nightmare is coming true

The fear that voting Ukip would prove a gateway drug for Labour voters appears to be being borne out. 

An astonishing new poll for the Cardiff University Governance Centre and ITV Cymru shows a historic result: the Conservatives ending a 167-year wait for an election victory in Wales.

The numbers that matter:

Conservatives: 40 per cent

Labour: 30 per cent

Plaid Cymru: 13 per cent

Liberal Democrats: 8 per cent

Ukip: 6 per cent

Others: 3 per cent

And for context, here’s what happened in 2015:

Labour 36.9 per cent

Conservatives 27.2 per cent

Ukip 13.6 per cent

Plaid Cymru 12.1 per cent

Liberal Democrat 6.5 per cent

Others 2.6 per cent

There’s a lot to note here. If repeated at a general election, this would mean Labour losing an election in Wales for the first time since the First World War. In addition to losing the popular vote, they would shed ten seats to the Tories.

We're talking about a far more significant reverse than merely losing the next election. 

I don’t want to detract from how bad the Labour performance is in a vacuum – they have lost 6.9 per cent of their vote on 2015, in any case the worst election performance for Labour in Wales since the rout of 1983.  But the really terrifying thing for Labour is not what is happening to their own vote, though that is pretty terrifying.

It’s what’s happened to the Conservative vote – growing in almost every direction. There is some direct Labour to Tory slippage. But the big problem is the longtime fear of Labour MPs – that voting for Ukip would be a gateway drug to voting for the mainstream right – appears to be being realised. Don't forget that most of the Ukip vote in Wales is drawn from people who voted Labour in 2010. (The unnoticed shift of the 2010-5 parliament in a lot of places was a big chunk of the Labour 2010 vote went to Ukip, but was replaced by a chunk of the 2010 Liberal Democrat vote.) 

If repeated across the United Kingdom, the Tory landslide will be larger than the 114 majority suggested by the polls and a simple national swing.

As I’ve said before, polls are useful, but they are not the be-all and end-all. The bad news is that this very much supports the pattern at elections since the referendum – Labour falling back, the Tories losing some votes to the Liberal Democrats but more than making up the loss thanks to the collapse of Ukip.

The word from Welsh Labour is that these figures “look about right” at least as far as the drop in the Labour vote, though of course they have no idea what is going on with their opponents’ vote share. As for the Conservatives, their early experiences on the doorstep do show the Ukip vote collapsing to their benefit.

One Labour MP said to me a few days again that they knew their vote was holding up – what they didn’t know was what was happening to their opponents. That’s particularly significant if you have a “safe seat” but less than 50 per cent of the vote.

Wales has local elections throughout the country on 4 May. They should provide an early sign whether these world-shaking figures are really true. 

Stephen Bush is special correspondent at the New Statesman. His daily briefing, Morning Call, provides a quick and essential guide to British politics.

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