19pc growth in HSBC pre-tax profit estimated as impairments stabilise
Bank benefited last year from lower impairment charges and better cost control, analysts say
Lower impairment charges from HSBC's North American operations and better cost control are likely to have boosted the banking giant's pre-tax profit by 19 per cent last year, analysts estimate.
They are tipping, on average, a figure of US$24.5 billion for Europe's biggest lender, which will announce its results on Monday.
Any positive rerating of its investment potential would hinge on the prospects for revenue growth and improved interest margin, they said, while unexpected fines and regulatory costs topped the list of downside risks.
HSBC chief executive Stuart Gulliver has pledged to focus on cost control and has achieved total savings of US$4.8 billion since becoming head of the bank in 2011.
But rounds of disposals of business arms and portfolios have raised investors' eyebrows and sparked concern among analysts about a lack of core growth.
"We continue to believe a return of top-line growth is a prerequisite for a sustainable rerating of the stock," UBS analyst Steve Andrews said.
"Unfortunately this has been an area that has seen constant expectations downgrades over the past year."