HSBC chairman steps down; says Q1 results better than last year

HSBC chairman steps down; says Q1 results better than last year

	Published : Sat, 27 May 2006 09:30 By : James Rowe Print this Story

LONDON - HSBC Holdings PLC, the biggest bank in Europe said that its first-quarter results were better than those reported at the same time last year. Sir John Bond, who will step down as the executive chairman of the group, said that the robust performance was due to the surge in global economic growth as well as stable credit environment in the US.

"When we reported our results for 2005 in early March we said that, although we remain mindful of the imbalances in the world economy, the outlook for 2006 was encouraging. So far, this has proved to be the case," Bond told shareholders at the bank's annual general meeting. "We have seen broadly based economic growth...It is now clear that the spike in (US) bankruptcy filings experienced in the final quarter of last year was a result of changes in bankruptcy laws rather than economic deterioration."

HSBC is just over halfway through its corporate, investment banking and markets (CIBM) business plan spread over 5 years. Sir Bond said that the bank was on target with the plan. "As at the end of the first quarter, the results of all of our customer groups were better than those achieved during the same period last year," Bond said. Asked about the impact of the departure of John Studzinski, the former co-head of CIBM on the future of the plan, Bond replied, "We are sorry to see John Studzinski go, but one individual does not make HSBC. We will continue to push ahead with the strategy."

He was however non-committal about the group's acquisition strategy in the months ahead, "Although we made a small number of acquisitions in 2005 to complement existing businesses, our strong preference is to concentrate on organic growth," he observed. HSBC shares were up 0.7 percent at 934-1/2 pence in early trading.

Although the results are coming in thick and fast, shareholders had complained about the massive pay rises of the executives. Sir John had received £4.5 million as total pay last year with £1.3 million in salary and £3.2 million in bonuses His annual pension will amount to £546,000. He will be joining mobile phone company Vodafone Group PLC as the chairman.