Brewin expects HSBC shares to underperform after mixed Q1

HSBC shares will continue to underperform the wider banking sector following the company's 'mixed' first-quarter results, according to wealth manager Brewin Dolphin.The bank reported a pre-tax profit of $6.79bn in the first quarter, down 20% year-on-year but above the company-compiled consensus estimate of $6.57bn.However, revenues fell 14% to $15.88bn, well below the market forecast of $16.52bn.Brewin's Deputy Head of Equity Research, Ed Salvesen, said the revenue miss "has underwhelmed investors"."Overall, we would argue that this is a mixed set of results: costs, impairments and capital were all either better or in line with expectations. However, the revenue miss has disappointed. This is really down to Asia (down 22.5% year-on-year) and Latin America (down 15%)," Salvesen said.He believes the weaker-than-expected revenue validates Brewin's argument for being bearish on the emerging market-exposed banks and its continued preference for exposure to the UK retail banking sector."The question comes now round to when is the end as management is already pulling the right levers to control the business. Impairment trends are improving and costs look to be in control. If revenue can show signs of improvement then the investment case will return, especially with interest rates increasing in 2015. We continue believe the shares will underperform the sector."The stock was down 1.2% at 597.1p by 13:29.BC