* HSBC, SocGen, Credit Agricole, Commerzbank report Q1
* Progress on restructuring key issue for all banks
* HSBC profit seen up 87 pct to $8.1 bln
* SocGen, C.Agricole profits seen down
By Steve Slater and Lionel Laurent
LONDON/PARIS, May 7 HSBC is expected to
almost double first quarter profits to about $8 billion on
Tuesday helped by a fall in costs and bad debts and showing the
benefits of a three-year restructuring that is nearly complete.
The results will keep HSBC as one of the most profitable and
most strongly capitalised banks in the world although Europe's
biggest bank still has more to do on costs.
HSBC, like many of its rivals in Europe and the United
States, has had to cut back to recover from the financial crisis
and cope with the harsher business environment and tighter
regulation that has followed it.
The bank acted sooner more aggressively than many of its
peers, some of which are only now making cuts.
The bank's Chief Executive Stuart Gulliver has already
slashed $3.5 billion in annual expenses - 38,000 jobs have gone.
The CEO has struck 52 deals to shed businesses that deliver
low profits or lack scale but is struggling to get costs to
below a target of 52 percent of income.
HSBC's complexity, its unprofitability in many countries and
a negative impact on income from low interest rates mean
Gulliver is likely to fall short of his cost/income target by
the end of this year.
He is due to update investors on strategy on May 15, which
is likely to include another $1 billion in savings.
Costs in the latest quarter are expected to drop to $9.6
billion, from $10.4 billion a year ago, analysts forecast.
HSBC is expected to report a pretax profit of $8.1 billion
for the three months to the end of March, according to the
consensus forecast of 14 analysts provided by the company.
The latest quarter will benefit from more than $1 billion of
gains from a reclassification of its stake in Industrial Bank in
China and other exceptional items, analysts estimate.
EURO ZONE BANK TROUBLES
Cost-cutting and restructuring will also be the focus at a
trio of euro zone banks - France's Societe Generale
and Credit Agricole and Germany's Commerzbank
- that also report first quarter results on Tuesday.
Unlike HSBC, which has offset weakness in Europe with strong
growth in Asia, these banks are likely to show the impact of the
euro zone crisis more sharply.
SocGen and Credit Agricole, France's second and third
biggest banks, are expected to post profit falls, partly as a
result of record unemployment and weak growth in their home
SocGen's first quarter net profit is expected to drop 7.8
percent to 675 million euros ($885.36 million), according to the
mean estimate of analyst forecasts compiled by Thomson Reuters
I/B/E/S. Revenues are seen falling 16.8 percent to 5.26 billion.
Credit Agricole is expected to post a one-third fall in
earnings to 674.6 million euros, according to Thomson Reuters
I/B/E/S. Revenues are seen down 28 percent to 3.9 billion euros.
In Germany, Commerzbank has already said it continued to
lose money in the first quarter due to restructuring charges
linked to job cuts. Analysts estimate Germany's second biggest
bank's loss at 125 million euros.
More details are expected on the bank's planned 2.5 billion
euro capital increase to repay some of its state bailout. This
could take place in mid-May and follows rival Deutsche Bank's
3 billion euros share sale last week.