HSBC bullish as profits leap 74%
EASING OF COVID FEARS BOOSTS RECOVERY
PROFITS at banking giant HSBC’s UK arm surged by more than 180% in the three months to the end of September.
The lender’s “ring-fenced” bank raked in just over £1billion – up from £382million a year ago – helped by not taking as big a hit from loans it estimated could turn sour in the depths of the Covid crisis.
It came as HSBC reported a 74% jump in global profits to nearly £4bn between July and September equivalent to £33m a day.
The surge prompted bosses to announce a shareholder-boosting £1.45bn share buyback scheme.
Banks’ balance sheets have bounced back after reversing the credit losses they accounted for early in the pandemic. Action by governments around the world and the roll-out of vaccine programmes have meant the potential hit to firms and households has been less than banks first feared. HSBC UK’s net interest margin – a key measure showing the difference between the rate paid to savers and that levied on borrowers – was 1.6% in the three months to September, the same as the previous quarter. Globally, the group’s margin fell to 1.19%. This could increase if the Bank of England – and other central banks – raise interest rates to keep a lid on inflation. Meanwhile, HSBC shrugged off concerns about pandemic-related bad loans and property problems in its key market of China.
Chief executive Noel Quinn is betting on Asia to drive growth.
“While we retain a cautious outlook on the external risk environment, we believe that the lows of recent quarters are behind us,” he said.