HSBC, Europe's largest banks by assets, on Friday reported a 4 percent fall in profit before tax in the first quarter of 2018 as operating costs rose.
The bank's pre-tax profit for the first three months of the year fell to $4.755 billion from the $4.961 billion a year ago. At the same time, operating expenses were 13 percent higher at $9.4 billion.
Its revenue for the quarter, meanwhile, climbed to $13.71 billion from $12.993 billion a year ago.
The banking giant also said it is planning a share buyback of up to $2 billion — the only one it said it expects to conduct this year.
Although some analysts had expected pre-tax profit to rise, the company pointed to higher costs in the first quarter in explaining the decline.
"We also made strategic hires in our securities joint venture in mainland China, and invested to enhance our digital capabilities in all our global businesses. This targeted spending contributed to a rise in adjusted costs in the first three months of the year," HSBC's group chief executive, John Flint, said in a statement.
The bank's Hong Kong-listed shares, a heavyweight on the benchmark Hang Seng Index, fell 2.51 percent after the stock market resumed trading following a lunch break.
Nevertheless, the first-quarter numbers still "represent a good start for 2018 for HSBC," Iain Mackay, HSBC's group finance director, told CNBC's Sri Jegarajah after the release of the results.