Europe’s largest lender also blamed declines at its retail banking and wealth management businesses as it posted an underlying pre-tax profit of $6.8 billion (£4bn) for the first quarter, from $8.4bn a year earlier.
Chief executive Stuart Gulliver said its global banking and markets arm had put in a “relatively good performance”, but profits tumbled 19.1 per cent to $2.9bn as it was hit by “subdued activity levels”.
He added: “In our retail banking and wealth management (RBWM) business, revenues were impacted by changes in incentive plans and product pricing.”
Cenkos Securities analyst Sandy Chen described the overall results as “decent”, adding: “Management seemed convincing when they cited the transition away from product-based staff sales incentives to a balanced scorecard approach as having led to a one-off drop in RBWM income.”
Charges linked to “customer redress” almost halved to $83 million following a drop in the amount of money set aside to cover claims for mis-sold payment protection insurance.
HSBC is listed in London but makes more than half its profits in Asia. The group has axed more than 40,000 jobs and sold or closed more than 60 businesses over the past three years.
Gulliver said: “We continued to experience muted customer activity in April.”
Ishaq Siddiqi, market strategist at ETX Capital, said: “Clearly management at the bank have struggled in recent quarters to rein in huge costs on the balance sheet. At the same time, HSBC is suffering from the same problem in investment banking operations that its peers are currently experiencing.”
Rival Barclays suffered a 49 per cent slump in profits at its investment bank during the first quarter and chief executive Antony Jenkins will today announce the results of a strategic review that could lead to more job losses at the division.