HSBC profit soars to $4.6b as huge re­struc­ture bears fruit

Mas­sive jump in pre-tax earn­ings comes af­ter re­struc­tur­ing that has seen it bounce back

Gulf News - - Business -

Prof­its at bank­ing gi­ant HSBC leapt five fold in the third quar­ter to $4.6 bil­lion (Dh16.89 bil­lion), the com­pany said yes­ter­day, as busi­ness booms in Asia and a huge re­struc­tur­ing drive bears fruit.

The mas­sive jump in pre-tax prof­its came weeks af­ter a new chief ex­ec­u­tive was un­veiled as part of a man­age­ment over­haul that has seen the Lon­don-based be­he­moth roar back from costly write downs.

John Flint, head of re­tail bank­ing and wealth man­age­ment, will take up his po­si­tion in Fe­bru­ary when cur­rent head Stu­art Gul­liver steps down, and has said he wants to “ac­cel­er­ate the pace of change”.

The Asia-fo­cused firm has been on a re­cov­ery drive to stream­line its busi­ness and slash costs since 2015, in­clud­ing lay­ing off tens of thou­sands of staff.

That came as part of widerang­ing re­struc­tur­ing pro­grammes dur­ing a trou­bled pe­riod for the bank and sec­tor as a whole fol­low­ing the global fi­nan­cial cri­sis in 2008.

Re­ported pre-tax profit jumped to $4.6 bil­lion in the three months to the end of Septem­ber, com­pared with $843 mil­lion over the same pe­riod in 2016.

Shares were up 0.7 per cent at HK$77.65 ($9.95) in early af­ter­noon trad­ing.

Gul­liver said the bank had “main­tained good mo­men­tum in the third quar­ter”, with higher rev­enue across its main global busi­nesses.

“Our pivot to Asia is driv­ing higher re­turns and lend­ing growth, par­tic­u­larly in Hong Kong,” he added.

Net profit also rose from a loss of $617 mil­lion in the third quar­ter of 2016 to $2.96 bil­lion.

Prof­its in 2016 had been hit by the loss on sale of the bank’s op­er­a­tions in Brazil, the bank said in its state­ment. Le­gal shadow An­a­lysts said the re­sult was bet­ter than ex­pected.

“I think HSBC is one of the best in­ter­na­tional bank­ing stocks at this mo­ment,” Dickie Wong, ex­ec­u­tive di­rec­tor of re­search at Kingston Se­cu­ri­ties, told AFP.

“It is the third con­sec­u­tive quar­ter that earn­ings and rev­enue have in­creased.”

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