HSBC Holdings PLC saw its first-quarter net profits fall by 38 percent after a larger tax bill and higher insurance claims and liabilities.
For the three months to March 31, HSBC reported Tuesday a net profit of $2.58 billion for the period, down from $4.15 billion a year earlier. Operating income was flat at $20.44 billion.
The bank said its tax bill rose from $491 million a year ago to $1.39 billion in the first quarter, and insurance claims and liabilities increased by $836 million.
Gary Greenwood, analyst at Shore Capital, said the bank had reported "a pretty decent set of numbers" with a strong recovery in global banking and markets, a reduction in its underlying cost/income ratio and a cut in impairments from $3 billion to $2.4 billion.
HSBC shares were up 1 percent at 561 pence following the release of the report, which was better than expected.
"We continued to make good progress in implementing our strategy, with 11 transactions to dispose of or close businesses announced since the start of 2012, and we continued to position the business for growth with increased revenues in Hong Kong, Latin America and rest of Asia-Pacific against the previous quarter," Chief Executive Stuart Gulliver said.
The number of full-time equivalent employees at the end of the quarter was 285,000, down 3,500 from the previous quarter, the bank said.