HSBC shares rally on profit results

HSBC shares rallied yesterday in a positive response to quarterly profit results after the British banking giant underwent a radical cost-cutting exercise.

In the three months to September its adjusted pretax profit-which strips out one-off items and unfavourable currency movements-rose seven percent from a year earlier to $5.59 billion, beating analysts’ expectations. Reported pre-tax profit, however, plunged 86 percent from a year earlier to $843 million. That figure included the impact of the sale of the bank’s Brazil business, which set the lender back $1.7 billion.

“Reported profits were down, but adjusted profits were higher than last year’s third quarter in all four global businesses and four out of five regions,” said HSBC global chief executive Stuart Gulliver.

The bank posted a net loss of $204 million for the three-month period, reversing a year-earlier net profit of $5.23 billion. HSBC last year announced a radical overhaul to cut annual costs by $5 billion over two years by shedding 50,000 jobs worldwide, exiting unprofitable businesses and focusing more on Asia. Gulliver said the bank had achieved $2.8 billion in annualised savings so far and was on track to reach its end-2017 target.