Europe's biggest bank HSBC reports a 14 percent drop in quarterly profit, citing market volatility as a key factor. And, as Sara Hemrajani reports, that uncertainty has also taken a toll on Switzerland's UBS and Germany's Commerzbank.
It wasn't a prosperous new year for the stock markets -- and now Europe's top banks are revealing the extent of the damage. HSBC, UBS and Commerzbank all saying the high levels of market volatility made a big dent in their earnings. SOUNDBITE: Chris Beauchamp, IG market analyst, saying (English): "Overall it has been a very bleak earnings season for the banking sector. And I think that reflects concerns over the broader global slowdown, concerns that M&A might not be taking off in the way we'd hoped it would, and also of course, the poorer revenues in terms of trading, and that's a major issue that's been lingering for a while but it seems to have come to the fore in this quarter." At HSBC, first quarter profit dropped 14 percent -- that's about a billion dollars less than the same period last year. But analysts were actually expecting far worse. HSBC chief Stuart Gulliver says his company has been "resilient in tough market conditions". Over at UBS, income fell nearly two-thirds. The Swiss lender says it saw more "client risk aversion" from market, economic and geopolitical uncertainties. And it's a similar picture at Germany's Commerzbank, where net profit tumbled by half. Analysts say these figures are likely to tighten the grip on expenses and costs. SOUNDBITE: Chris Beauchamp, IG market analyst, saying (English): "You've got reports coming through from HSBC of potential further job cuts. UBS warning of streamlining its asset management division despite the improvement there. So they're looking to make cost savings where they can and where it won't have too much of an impact on the bottom line." Amid the doom and gloom, BNP Paribas bucked the trend. Its profit rose 10 percent as business improved in France, Italy and Belgium.