HSBC reports 19 percent fall in profit before tax; CFO says markets should be 'encouraged'

The chief financial officer of HSBC Holdings Plc, has told CNBC he hopes investors will be encouraged by the bank's first-quarter results despite posting a 19 percent fall in pre-tax profit.

The bank beat analysts' expectations when it posted first-quarter results of $5 billion for profit before tax Thursday, ahead of the $4.31 billion predicted by compiled estimates.

"We'd certainly be very pleased if the market looked at these numbers as reasonably encouraging, coming with good momentum out of the fourth quarter of last year into the first of this," Iain Mackay told CNBC Thursday.

The bank's reported revenue came in at $13 billion in the first quarter, 13 percent lower than the same period a year ago.

"This is a good set of results," CEO Stuart Gulliver said in a statement, explaining that reported profits were down due to a change in accounting treatment of the fair value of its own debt. In addition, 2016's first quarter profits included the operating results of a Brazil business that HSBC sold in July last year.

"Global Banking and Markets had a great quarter; Commercial Banking delivered higher revenue from our liquidity and cash management activities; and Retail Banking and Wealth Management was supported by rising interest rates and renewed customer investment appetite," Gulliver said in a statement.

He also said the bank has completed a $1 billion shares buy-back program that it announced in February.

Jackson Wong from Huarong International Securities told CNBC's "Capital Connection" that HSBC's latest set of financial results was "pretty decent."

"I do know many analysts expected a little bit more than $5 billion but I think in this environment, they can get $5 billion pre-tax profit and only 13 percent drop in revenue, they're doing pretty decent," he said.

Iain Mackay, group finance director of HSBC Holdings speaking on CNBC, said the bank had "good traction on costs" and added that the bank is "encouraged" by business opportunities across all of its markets.

Already, rivals RBS and Lloyds reported stronger-than-expected profits, while Barclays disappointed.

Investors are focused on whether HSBC can improve returns after a disappointing full-year report for 2016 released this February, and whether its trading unit delivered strong results like U.S. rivals. As well, speculation ahead of the results was that HSBC may announce a share buyback.

HSBC in March named AIA Group boss Mark Tucker as the new chairman of its board, replacing veteran Douglas Flint, whose departure will end one of the longest-serving management partnerships at a major global bank.

CEO Stuart Gulliver is also due to leave in 2018, and one of the main tasks facing Tucker immediately after taking over the new role in October will be selecting a new chief executive for Europe's biggest bank.

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– Karen Gilchrist and Reuters contributed to this report