Starbucks Corp    (SBUX)    $116.15        (%)

Starbucks Corporation (NASDAQ: SBUX) today reported financial results for its 13-week fiscal first quarter ended December 27, 2020. GAAP results in fiscal 2021 and fiscal 2020 include items that are excluded from non-GAAP results. Please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release for more information.

“I am very pleased with our start to fiscal 2021, with meaningful, sequential improvements in quarterly financial results despite ongoing business disruption from the pandemic. Investments in our partners, beverage innovation and digital customer relationships continued to fuel our recovery and position Starbucks for long-term, sustainable growth,” said Kevin Johnson, president and ceo.

“Our results demonstrate the continued strength and relevance of our brand, the effectiveness of the actions we’ve taken to adapt to changes in consumer behavior and the steadfast commitment of our green apron partners to serve our customers and communities. We remain optimistic about our robust operating outlook for fiscal 2021 as well as our ability to unlock the full potential of Starbucks to create value for our stakeholders,” concluded Johnson.

Q1 Fiscal 2021 Highlights

• Global comparable store sales declined 5%, driven by a 19% decrease in comparable transactions, partially offset by a 17% increase in average ticket
  • Americas comparable store sales declined 6%, driven by a 21% decrease in comparable transactions, partially offset by a 20% increase in average ticket; U.S. comparable store sales declined 5%, driven by a 21% decrease in comparable transactions, partially offset by a 19% increase in average ticket
  • International comparable store sales were down 3%, driven by a 10% decline in comparable transactions, partially offset by an 8% increase in average ticket; China comparable store sales were up 5%, driven by a 9% increase in average ticket, partially offset by a 3% decline in transactions; International and China comparable store sales are inclusive of a benefit from value-added tax exemptions of approximately 3% and 5%, respectively
• The company opened 278 net new stores in the first quarter of fiscal 2021, yielding 4% year-over-year unit growth, ending the period with 32,938 stores globally, of which 51% and 49% were company-operated and licensed, respectively
  • Stores in the U.S. and China comprised 61% of the company’s global portfolio at the end of the first quarter of fiscal 2021, with 15,340 and 4,863 stores, respectively
• Consolidated net revenues of $6.7 billion declined 5% from the prior year primarily due to the impact of the COVID-19 pandemic
  • Impact included the effects of reduced customer traffic, modified operations, reduced store operating hours and temporary store closures
• GAAP operating margin of 13.5%, down from 17.2% in the prior year primarily due to the COVID-19 pandemic, mainly sales deleverage, as well as growth in wages and benefits and Americas store portfolio optimization expenses, partially offset by labor efficiency and the impact of pricing in the Americas
  • Non-GAAP operating margin of 15.5%, down from 18.2% in the prior year
• GAAP earnings per share of $0.53, down from $0.74 in the prior year primarily due to unfavorable impacts related to the COVID-19 pandemic
  • Non-GAAP earnings per share of $0.61, down from $0.79 in the prior year
• Starbucks ® Rewards loyalty program 90-day active members in the U.S. increased to 21.8 million, up 15% year-over-year

Net revenues for the Americas segment of $4.7 billion in Q1 FY21 were 6% lower relative to Q1 FY20, primarily due to a 6% decline in comparable store sales as well as lower product sales to and royalty revenues from our licensees primarily due to the impact of the COVID-19 pandemic. These declines were slightly offset by 105 net new store openings, or 1% store growth, over the past 12 months.

The Americas segment reported operating income of $813.5 million in Q1 FY21, compared to $1.1 billion in Q1 FY20. Operating margin of 17.3% contracted 460 basis points, primarily due to the impact of the COVID-19 pandemic, including sales deleverage and additional costs incurred, growth in retail partner wages and benefits as well as expenses relating to the Americas store portfolio optimization, partially offset by labor efficiency and pricing.

Full Year Fiscal 2021 Guidance

Please note that  Starbucks fiscal year 2021 is a 53-week year instead of the usual 52 weeks. The impact of the 53^rd  week will be reflected in our results for the fourth quarter of fiscal 2021. All full-year guidance for the metrics noted below is for fiscal year 2021 on a 53-week basis except comparable store sales growth metrics, which are relative to fiscal year 2020 on a 52-week basis.

The company  updates  fiscal year 2021 GAAP EPS guidance:

• GAAP EPS in the range of $2.42 to $2.62, inclusive of a $0.10 impact attributable to the 53^rd  week
  • (previously $2.34 to $2.54, inclusive of a $0.10 impact attributable to the 53^rd  week)

The company  reiterates  the following fiscal year 2021 guidance:

• Global comparable store sales growth of 18% to 23%
• Americas and U.S. comparable store sales growth of 17% to 22%
• International comparable store sales growth of 25% to 30%
  • China comparable store sales growth of 27% to 32%
• Approximately 2,150 new store openings and 1,100 net new Starbucks stores globally
  • Americas approximately 850 new store openings and approximately 50 net new stores
  • International approximately 1,300 new store openings and 1,050 net new stores
    • Approximately 600 net new stores in China
• Consolidated revenue of $28.0 billion to $29.0 billion, inclusive of a $500 million impact attributable to the 53^rd  week
  • Channel Development revenue of $1.4 billion to $1.6 billion
• Consolidated GAAP operating margin of 14% to 15%
  • Consolidated Non-GAAP operating margin of 16% to 17%
• Interest expense of approximately $470 million to $480 million
• GAAP and non-GAAP effective tax rates in the mid-20%s
• Non-GAAP EPS in the range of $2.70 to $2.90, inclusive of a $0.10 impact attributable to the 53^rd  week
• Capital expenditures of approximately $1.9 billion

Q2 Fiscal 2021 Guidance

The company  introduces  the following  Q2 fiscal 2021  guidance (growth targets are relative to Q2 fiscal 2020):

• Q2 FY21 U.S. comparable store sales growth of approximately 5% to 10%
• Q2 FY21 China comparable store sales growth of nearly 100%
• Q2 FY21 GAAP EPS in the range of $0.36 to $0.41
  • Q2 FY21 Non-GAAP EPS in the range of $0.45 to $0.50

Please note, the guidance provided above is dependent on our current expectations, which may be impacted by evolving external conditions and local safety guidelines as well as shifts in customer routines, preferences and mobility.

Please refer to the reconciliation of GAAP measures to non-GAAP measures at the end of this release.

The company will provide additional information regarding its business outlook during its regularly scheduled quarterly earnings conference call today; this information will also be available following the call on the company’s website at  http://investor.starbucks.com.

CWEB Analyst’s have initiated a Buy Rating for Starbucks Corporation (NASDAQ: SBUX)    and potential upside of $168 by 2021.

Pinterest, Inc. (NYSE: PINS) today announced financial results for the quarter ended March 31, 2021.

• Q1 revenue grew 78% year over year to $485 million.
• Global Monthly Active Users (MAUs) grew 30% year over year to 478 million.
• GAAP net loss was $(22) million for Q1. Adjusted EBITDA was $84 million for Q1.

“Whether it’s recipe ideas during the pandemic or dream vacation planning for the future, I’m proud that we now help 478 million people every month find inspiration to create a life they love,” said Ben Silbermann, CEO and co-founder, Pinterest. “This quarter, we continued strong growth internationally, including our recent launch of advertising in Brazil, and made significant progress with shopping, making it easier for people to discover and buy products they find on Pinterest.”

“Q1 results were strong, building off the momentum of 2020. Continued rapid growth of our international business and increased adoption from medium and small advertisers drove 78% year-over-year revenue growth,” said Todd Morgenfeld, CFO and Head of Business Operations, Pinterest. “While we continue to navigate COVID-19 uncertainty, we plan to stay focused on driving investments that deliver an inspirational Pinner experience and measurable advertiser value.”

Q1 2021 Financial Highlights

The following table summarizes our consolidated financial results (in thousands, except percentages, unaudited):

NM – not meaningful

* Non-cash charitable contributions of $1.5 million were not excluded for non-GAAP purposes for the three months ended March 31, 2020 as these were not material. For more information on these non-GAAP financial measures, please see “―About non-GAAP financial measures” and the tables under “―Reconciliation of GAAP to non-GAAP financial results” included at the end of this release.

Q1 2021 Other Highlights

The following table sets forth our revenue, MAUs and average revenue per user (“ARPU”) based on the geographic location of our users (in millions, except ARPU and percentages, unaudited):

Guidance

We continue to navigate uncertainty given the ongoing COVID-19 pandemic and other factors. Our current expectation is that Q2 revenue will grow around 105% year over year. In Q2, we expect global MAUs to grow in the mid-teens and US MAUs to be around flat on a year-over-year percentage basis. Finally, we expect sequential operating expense growth to accelerate in Q2 as we continue to ramp investments in our long-term initiatives and growth drivers.

We intend to provide further detail on our outlook during the conference call.

Our strategic priorities for 2021 remain anchored in content, the Pinner experience, advertiser success and shopping. We plan to continue investing in these this year. We expect R&D efforts to continue to focus on Pinner product, ad product and measurement investments. We intend to grow our headcount further, in particular to support our international expansion efforts. We also intend to scale our comprehension and brand marketing efforts in 2021. We think these investments will support long-term growth and continue to build the foundations for a scaled business over time.

CWEB Analyst’s have initiated a Buy Rating for Pinterest, Inc. (NYSE: PINS)    and potential upside of $200 by 2021.

Microsoft Corp. (NASDAQ:MSFT) today announced the following results for the quarter ended December 31, 2020, as compared to the corresponding period of last fiscal year: Microsoft Cloud Strength Drives Second Quarter Results

• Revenue was $43.1 billion and increased 17%
• Operating income was $17.9 billion and increased 29%
• Net income was $15.5 billion and increased 33%
• Diluted earnings per share was $2.03 and increased 34%

“What we have witnessed over the past year is the dawn of a second wave of digital transformation sweeping every company and every industry,” said Satya Nadella, chief executive officer of Microsoft. “Building their own digital capability is the new currency driving every organization’s resilience and growth. Microsoft is powering this shift with the world’s largest and most comprehensive cloud platform.”

“Accelerating demand for our differentiated offerings drove commercial cloud revenue to $16.7 billion, up 34% year over year,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “We continue to benefit from our investments in strategic, high-growth areas.”

Business Highlights

Revenue in Productivity and Business Processes was $13.4 billion and increased 13% (up 11% in constant currency), with the following business highlights:

• Office Commercial products and cloud services revenue increased 11% (up 9% in constant currency) driven by Office 365 Commercial revenue growth of 21% (up 20% in constant currency)
• Office Consumer products and cloud services revenue increased 7% (up 6% in constant currency) and Microsoft 365 Consumer subscribers increased to 47.5 million
• LinkedIn revenue increased 23% (up 22% in constant currency)
• Dynamics products and cloud services revenue increased 21% (up 18% in constant currency) driven by Dynamics 365 revenue growth of 39% (up 37% in constant currency)

Revenue in Intelligent Cloud was $14.6 billion and increased 23% (up 22% in constant currency), with the following business highlights:

• Server products and cloud services revenue increased 26% (up 24% in constant currency) driven by Azure revenue growth of 50% (up 48% in constant currency)

Revenue in More Personal Computing was $15.1 billion and increased 14% (up 13% in constant currency), with the following business highlights:

• Windows OEM revenue increased 1%
• Windows Commercial products and cloud services revenue increased 10% (up 8% in constant currency)
• Xbox content and services revenue increased 40% (up 38% in constant currency)
• Surface revenue increased 3% (up 1%in constant currency)
• Search advertising revenue excluding traffic acquisition costs increased 2% (up 1% in constant currency)

Microsoft returned $10 billion to shareholders in the form of share repurchases and dividends in the second quarter of fiscal year 2021, an increase of 18% compared to the second quarter of fiscal year 2020.

Business Outlook

Microsoft will provide forward-looking guidance in connection with this quarterly earnings announcement on its earnings conference call and webcast.

Quarterly Highlights, Product Releases, and Enhancements  

Every quarter Microsoft delivers hundreds of products, either as new releases, services, or enhancements to current products and services. These releases are a result of significant research and development investments, made over multiple years, designed to help customers be more productive and secure and to deliver differentiated value across the cloud and the edge.

Here are the  major product releases and other highlights  for the quarter, organized by product categories, to help illustrate how we are accelerating innovation across our businesses while expanding our market opportunities.

Responding to COVID-19

At Microsoft, our focus remains on ensuring the safety of our employees, striving to protect the health and well-being of the communities in which we operate, and providing technology and resources to our customers and partners to help them do their best work while remote. Additional information about Microsoft’s COVID-19 response can be found  here.

Environmental, Social, and Governance (ESG)

To better execute on Microsoft’s mission, we focus our Environmental, Social, and Governance (ESG) efforts where we can have the most positive impact. To learn more about our latest initiatives and priorities, please visit our investor relations  ESG website.

 Constant Currency

Microsoft presents constant currency information to provide a framework for assessing how our underlying businesses performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative prior period results for entities reporting in currencies other than United States dollars are converted into United States dollars using the average exchange rates from the comparative period rather than the actual exchange rates in effect during the respective periods. All growth comparisons relate to the corresponding period in the last fiscal year. Microsoft has provided this non-GAAP financial information to aid investors in better understanding our performance. The non-GAAP financial measures presented in this release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with GAAP.

About Microsoft

Microsoft (Nasdaq “MSFT” @microsoft) enables digital transformation for the era of an intelligent cloud and an intelligent edge. Its mission is to empower every person and every organization on the planet to achieve more.

Forward-Looking Statements

Statements in this release that are “forward-looking statements” are based on current expectations and assumptions that are subject to risks and uncertainties. Actual results could differ materially because of factors such as:

• intense competition in all of our markets that may lead to lower revenue or operating margins;
• increasing focus on cloud-based services presenting execution and competitive risks;
• significant investments in products and services that may not achieve expected returns;
• acquisitions, joint ventures, and strategic alliances that may have an adverse effect on our business;
• impairment of goodwill or amortizable intangible assets causing a significant charge to earnings;
• cyberattacks and security vulnerabilities that could lead to reduced revenue, increased costs, liability claims, or harm to our reputation or competitive position;
• disclosure and misuse of personal data that could cause liability and harm to our reputation;
• the possibility that we may not be able to protect information stored in our products and services from use by others;
• abuse of our advertising or social platforms that may harm our reputation or user engagement;
• the development of the internet of things presenting security, privacy, and execution risks;
• issues about the use of artificial intelligence in our offerings that may result in competitive harm, legal liability, or reputational harm;
• excessive outages, data losses, and disruptions of our online services if we fail to maintain an adequate operations infrastructure;
• quality or supply problems;
• government litigation and regulatory activity relating to competition rules that may limit how we design and market our products;
• potential liability under trade protection, anti-corruption, and other laws resulting from our global operations;
• laws and regulations relating to the handling of personal data that may impede the adoption of our services or result in increased costs, legal claims, fines, or reputational damage;
• claims against us that may result in adverse outcomes in legal disputes;
• uncertainties relating to our business with government customers;
• additional tax liabilities;
• the possibility that we may fail to protect our source code;
• legal changes, our evolving business model, piracy, and other factors may decrease the value of our intellectual property;
• claims that Microsoft has infringed the intellectual property rights of others;
• damage to our reputation or our brands that may harm our business and operating results;
• adverse economic or market conditions that may harm our business;
• catastrophic events or geo-political conditions, such as the COVID-19 pandemic, that may disrupt our business;
• exposure to increased economic and operational uncertainties from operating a global business, including the effects of foreign currency exchange and
• the dependence of our business on our ability to attract and retain talented employees.

For more information about risks and uncertainties associated with Microsoft’s business, please refer to the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and “Risk Factors” sections of Microsoft’s SEC filings, including, but not limited to, its annual report on Form 10-K and quarterly reports on Form 10-Q, copies of which may be obtained by contacting Microsoft’s Investor Relations department at (800) 285-7772 or at Microsoft’s Investor Relations website at  http://www.microsoft.com/en-us/investor.

All information in this release is as of December 31, 2020. The company undertakes no duty to update any forward-looking statement to conform the statement to actual results or changes in the company’s expectations.

For more information, press only:

Microsoft Media Relations, WE Communications for Microsoft, (425) 638-7777,rrt@we-worldwide.com

For more information, financial analysts and investors only:

Michael Spencer, General Manager, Investor Relations, (425) 706-4400

Note to editors: For more information, news and perspectives from Microsoft, please visit the Microsoft News Center  at  http://www.microsoft.com/news. Web links, telephone numbers, and titles were correct at time of publication, but may since have changed. Shareholder and financial information, as well as today’s 2:30 p.m. Pacific time conference call with investors and analysts, is available at  http://www.microsoft.com/en-us/investor

CWEB Analyst’s have initiated a Buy Rating for Microsoft (MSFT)    and potential upside of $600 by 2021.

Google Smashes Sales Records as Ad Market Booms and spending has increased.

Alphabet Inc. (NASDAQ: GOOG, GOOGL) today announced financial results for the quarter ended March 31, 2021.

Sundar Pichai, CEO of Google and Alphabet, said: “Over the last year, people have turned to Google Search and many online services to stay informed, connected and entertained. We’ve continued our focus on delivering trusted
services to help people around the world. Our Cloud services are helping businesses, big and small, accelerate their digital transformations.”

Ruth Porat, CFO of Google and Alphabet, said: “Total revenues of $55.3 billion in the first quarter reflect elevated
consumer activity online and broad based growth in advertiser revenue. We’re very pleased with the ongoing
momentum in Google Cloud, with revenues of $4.0 billion in the quarter reflecting strength and opportunity in both
GCP and Workspace.”

Alphabet Inc. said Tuesday that it will launch an additional $50 billion stock repurchase.

The internet search-engine giant said its board of directors have authorized the buyback class C capital stock through the open market or through privately negotiated transactions.

Search was the big breadwinner, again, with $31.9 billion in sales, compared with $24.5 billion in the same quarter a year ago. YouTube ad sales jumped 49% year-over-year to $6 billion.

CWEB Analyst’s have initiated a Buy Rating for Google (GOOGL)    and potential upside of $3500 by 2021.

General Electric (NYSE:GE) posted stronger-than-expected first quarter earnings Tuesday.

Positioned to deliver on 2021 commitments and long-term profitable growth  

• Total orders $17.0B, (13)%; organic orders (8)%  
• Total revenues (GAAP) $17.1B, (12)%; Industrial organic revenues* $16.0B, (10)%  
• Industrial profit margin (GAAP) of 2.3%, (3,260) bps; adjusted Industrial profit margin* 5.1%, (40) bps, +110 bps   organically  
• Continuing EPS (GAAP) of $0.00, $(0.70); adjusted EPS* $0.03, +$0.01  
• GE Industrial CFOA (GAAP) $(0.5)B, +$1.2B; GE Industrial free cash flow* $(0.8)B, +$1.7B, excluding BioPharma BOSTON – April 27, 2021 – GE (NYSE:GE) announced results today for the first quarter ending March 31, 2021.  

GE Chairman and CEO H. Lawrence Culp, Jr. said, “I am proud of the GE team’s solid first quarter results, despite a still   difficult environment for Aviation. We are improving our cash performance and profitability with Industrial free cash flow   growth of $1.7 billion year-over-year, excluding BioPharma, and organic margin expansion across all segments, except   Aviation. This continued progress sets us up well to deliver on our 2021 commitments.”  

Culp added, “Our recent GECAS transaction serves as an important catalyst in our transformation to a more focused,   simpler, and stronger industrial company. At the same time, our businesses are building momentum by accelerating our   lean and decentralization efforts. We are shifting more toward offense and capturing opportunities in the energy transition,   precision health, and future of flight. I am confident we are well positioned to drive profitable growth, achieving high single   digit free cash flow margins over time and creating long-term value for shareholders.”  

GE continues to build momentum on a stronger foundation:    

• Simplifying and strengthening GE: The recently announced GECAS and AerCap transaction focuses GE on its   industrial core and provides cash and a meaningful equity stake for further upside and flexibility as the aviation   industry recovers. GE expects to use the proceeds from the transaction to further reduce debt for a total reduction   of more than $70 billion since the end of 2018.    
• Accelerating lean & decentralization: GE’s lean transformation is scaling company-wide, driving sustainable   performance, including improved safety, quality, delivery, and cost, as well as high-quality revenue and cultural   change. Coupled with significant decentralization efforts, GE is enabling improvement at deeper levels of the   organization across nearly 30 P&Ls to drive greater accountability and move action closer to customers.    
• Investing in technology and serving customers: Driving organic growth efforts through new product   introductions and services capabilities. Recent wins across our portfolio include:  

â—¦ Energy transition: Secured largest combined Onshore Wind project in Renewable Energy’s history,   consisting of more than 530 turbines for the 1.5GW North Central Wind Energy Facilities in Oklahoma.   Began first commercial operation of Gas Power’s 9HA.02 gas turbine, the world’s largest and most efficient   gas turbine, at Southern Power Generation’s 1.4GW plant in Malaysia.    

* Non-GAAP Financial Measure  

â—¦

Precision health: Launched new, innovative solutions to support clinicians treating patients at the point of-care, assisting clinicians fighting COVID-19. Vscan Airâ„¢, a wireless, pocket-sized ultrasound with whole body scanning capabilities, delivers high-quality images directly to the clinician enabling sharing with   patients in real-time. Also launched Venue Fitâ„¢, a simplified, compact, intuitive ultrasound, as well as an   industry-first AI offering for cardiac imaging and a tool to display lung abnormalities on the Venueâ„¢ and   Venue Goâ„¢.    

â—¦ Future of flight: Secured agreements from Southwest Airlines for CFM International’s LEAP-1B engines to   power 100 Boeing 737 MAX 7 aircraft, along with a long-term services agreement, and Scandinavian   Airlines for CFM’s LEAP-1A engines to power 35 additional A320neo family aircraft, also with a long-term   services agreement, valued at $2.9 billion. CFM’s LEAP engines reduce fuel consumption by 15% compared   to CFM56 engines.  

Total Company Results  

We present both GAAP and non-GAAP measures to provide investors with additional information. We believe that providing these non-GAAP measures along   with GAAP measures allows for increased comparability of our ongoing performance from period to period. Please see pages 9-14 for explanations of why we use   these non-GAAP measures and the reconciliation to the most comparable GAAP financial measures.

2021 Outlook

GE reiterated its total company outlook for full-year 2021:
– GE Industrial revenues* to grow organically in the low-single-digit range.
– Adjusted GE Industrial profit margin* to expand organically by 250-plus basis points.
– Adjusted earnings per share* of $0.15 to $0.25.
– GE Industrial free cash flow* of $2.5 billion to $4.5 billion.
Effective April 1, GE discontinued the majority of our factoring programs. The expected Industrial CFOA impact will be about $3.5
billion to $4 billion with the majority felt in the second quarter, which will be excluded from our Industrial free cash flow
reporting. Combined with the $800 million reported cash impact in the first quarter from normal course activity, this equates to a
$4 billion to $5 billion cash range as described at the 2021 Outlook meeting in March.

HSBC Europe’s largest lender reported pre tax profit of 79% for the first quarter of 2021.

Financial performance (vs. 1Q20)  

• Reported profit after tax up 82% to $4.6bn and reported profit before tax up 79% to $5.8bn. Reduced revenue continued to reflect low interest rates. This impact was partly offset as 1Q20 included materially adverse market impacts in life insurance manufacturing and valuations in Global Banking and Markets (‘GBM’). In addition, there were releases of allowances for expected credit losses in the quarter, reflecting the improved economic outlook. Adjusted profit before tax up 109% to $6.4bn.  
• All regions profitable in 1Q21, notably HSBC UK Bank plc reported pre-tax profits of over $1.0bn in the quarter. While there continues to be interest rate headwinds, expected credit losses and other credit impairment charges (‘ECL’) fell, reflecting the improved economic outlook.  
• Reported revenue down 5% to $13.0bn due to the impact of 2020 interest rate reductions in all global businesses. This was partly offset by market impacts in life insurance manufacturing and valuations in GBM.  
• Net interest margin (‘NIM’) of 1.21%, down 33 basis points (‘bps’) from 1Q20. NIM broadly stable with 4Q20.  
• Reported ECL were a net release of $0.4bn, compared with a $3.0bn charge in 1Q20. The net release in 1Q21 primarily reflected an improvement in the economic outlook from 2020. Stage 3 ECL were lower, in part as 1Q20 included a large charge related to a corporate exposure in Singapore.  
• Reported operating expenses up 9% from higher restructuring and other related costs from our transformation programme and increased investment in technology. Adjusted operating expenses up 3% due to a higher performance-related pay accrual, partly offset by the impact of our cost-saving initiatives.  
• Lending increased by $2bn on a reported basis and $6bn on a constant currency basis in the quarter. Lending growth was in Wealth and Personal Banking (‘WPB’), notably mortgages in the UK and Hong Kong, and in Commercial Banking (‘CMB’) in areas of strategic focus.  
• Return on average tangible equity (‘RoTE’) (annualised) of 10.2%, up 6.0 percentage points from 1Q20. – Common equity tier 1 (‘CET1’) capital ratio of 15.9%, unchanged from 31 December 2020. 

Outlook  

• • The economic outlook has improved, giving us increasing confidence in our revenue growth plans. While early signs are positive, with evidence of growth in strategic areas, including improved lending pipelines, there remain uncertainties.  
  • Our 1Q21 results were favourably impacted by net ECL releases, particularly in the UK, reflecting improved economic forecasts. There remains a high degree of uncertainty as countries emerge from the pandemic at different speeds and as government support measures unwind. Based on the current consensus economic forecasts trajectory, we expect our ECL charge for 2021 to be below the medium-term range of 30bps to 40bps of average loans that we indicated at our 2020 annual results.  
  • We expect mid-single-digit percentage growth in customer lending during 2021. This growth remains highly dependent on the speed at which economies recover from the Covid-19 pandemic, together with the duration of various government support measures and restrictions.  
  • We continue to make progress against the strategic plan we announced in February 2021, which responds to the fundamental changes in our operating environment and aligns to our refreshed purpose, values and ambition. We expect to provide an update at our 2021 interim results in August.  
  • As indicated at our 2020 annual results in February 2021, we do not intend to pay quarterly dividends during 2021. The Group will consider whether to announce an interim dividend at our 2021 half-year results in August.

Noel Quinn, Group Chief Executive HSBC, said:    

“We had a good start to the year in support of our customers, while achieving materially enhanced returns for our shareholders. I am   pleased with our revenue and cost performance, but particularly with our significantly lower expected credit losses. Global Banking and   Markets had a good quarter, and we saw solid business growth in strategic areas, including Asia Wealth and trade finance, and   mortgages in Hong Kong and the UK. We also strengthened our lending pipelines in our retail and wholesale businesses.  

The execution of our growth and transformation plans is proceeding well. We made further progress in reducing both costs and risk weighted assets, and launched new products and capabilities in areas of strength.    

The economic outlook has improved, although uncertainties remain. We carry good momentum into the second quarter, while   maintaining conservative positions on capital, funding, liquidity and credit.”