HSBC profits fall 14% due to higher costs

HSBC branch
Image caption HSBC is expected to announce major cost-cutting work later this week

HSBC has seen its quarterly profits fall 14% due to higher costs.

The bank made a pre-tax profit of $4.9bn (£3bn) in the first three months of 2011, down from $5.7bn a year ago.

HSBC also announced that it would set aside £269m to pay compensation for UK customers who were mis-sold payment protection insurance (PPI).

Its latest profit figure comes two days before HSBC's new chief executive Stuart Gulliver is expected to announce substantial cost-cutting plans.

There is speculation that HSBC could exit from some countries, and reduce its branch network in others.

PPI policies are supposed to cover loan repayments if someone falls ill, has an accident or loses their job. But many of the policies were mis-sold by the UK banking industry.

Last month, the High Court backed new rules by the Financial Services Authority that force banks to go back over their past PPI sales to see if customers have a claim for mis-selling.

Related Internet links

The BBC is not responsible for the content of external Internet sites