By Marcus Leach
Higher costs have seen HSBC announce a 14 per cent decrease in profits for the opening quarter of 2011.
The banking giants made a pre-tax profit of $4.9 billion (£3 billion) in the first three months of 2011, a distinct from from $5.7 billion a year ago.
With the payment protection insurance debacle still ongoing the bank has also announced that they will set aside £269 million to cover compensation payments for UK customers.
"The rise in operating expenses compared with Q1 2010 largely reflected continued investment in our businesses in the faster-growing markets and in Global Banking and Markets," Group Chief Executive, Stuart Gulliver, commented.
"This is reflected principally in higher staff costs. The increase was also driven by a number of items which affected the comparisons with Q1 2010 and Q4 2010, in particular a provision of US$440m relating to payment protection insurance in the UK. These items were significant contributors to the rise in the cost efficiency ratio to 60.9%."
