HSBC Holdings, Europe’s largest bank, said first-quarter profit fell 20 per cent as gains from asset sales dwindled and investment-banking revenue slipped.

Pretax profit declined to $6.79 billion (€4.9bn) from $8.43 billion (€6bn) in the same period a year earlier, London-based HSBC said yesterday. Operating income before provisions slipped to $15.9 billion from $18.4 billion.

The lender, which derives the bulk of its profit from Asia, has closed or sold more than 60 businesses since 2011 to focus on its most profitable markets and is also seeking to cut costs.

One-time gains from asset sales in 2013 were not repeated in the quarter, while operating costs dropped 2 per cent to $8.8 billion, HSBC said.

The global banking and markets unit, which houses HSBC’s investment banking activities, “performed much better than peers”. Pretax profit at the division dropped 20 per cent to $2.87 billion from the year earlier period as income from its currencies and rates operations declined.

“We continued to experience muted customer activity in April,” HSBC said in the statement.

HSBC’s return on equity, a measure of profitability, declined to 11.7 per cent from 14.9 per cent a year earlier, the bank said. That compares with the company’s goal of 12 per cent to 15 per cent.

Costs as a proportion of revenue rose to 55.7 per cent from 50.8 per cent, in line with chief executive officer Stuart Gulliver’s “mid-50s” target.

Revenue declined to $15.8 billion from $18.4 billion.

Pretax profit in Asia fell to $3.76 billion from $5.51 billion, while earnings in Europe were little changed at $1.8 billion.

The bank booked a gain of $1.09 billion in the first quarter of 2013 after it changed its treatment of a stake in Industrial Bank. HSBC also sold its stake in Shenzhen, China-based Ping An Insurance (Group) for about $9.4 billion in February last year. – (Bloomberg)