HSBC Canada cites multiple factors as Q3 profit falls by 19%

HSBC Bank Canada reports it had a 19 per cent decline in third-quarter pre-tax profit, which fell by $44 million to $187 million.

The company — a subsidiary of Europe’s biggest bank — says it was affected by lower margins, lower gains on investments, higher costs and higher loan impairment charges, compared with the third quarter of 2014.

Overall charges for loan impairments and other credit provisions totalled $31 million, which was up $14 million or 82 per cent from a year earlier — mainly because of the bank’s exposure to the energy sector.

HSBC Canada’s commercial banking arm had the biggest decline, with profit before income tax expense falling to $103 million — down $40 million or 28 per cent compared with a year earlier.

HSBC Canada’s retail banking and wealth management also had a $13 million or 42 per cent decline at its retail banking and wealth management arm, which recorded $18 million in profit before income tax.

Its global bank and markets arm had an improved pre-tax profit of C$69 million, up $5 million or eight per cent.

HSBC Canada’s net profit including a C$50 million income tax expense was C$137 million, down from C$170 million in the third quarter of 2014 when HSBC recorded a C$61 million income tax expense.

Earnings per common share dropped to 26 cents from 32 cents.

Meanwhile, its parent HSBC Holdings reports that pre-tax profit has jumped by a third in the latest quarter as it paid out less in fines, settlements and British customer compensation.

The bank, Europe’s largest by market value, on Monday posted $6.1 billion in profit for the JulySeptember period, up 32 per cent from a year earlier.

Revenue slipped 4 per cent to $15.1 billion.

In June, the bank announced a major reorganization, including slashing tens of thousands of jobs and selling businesses to concentrate on fast-growing Asian economies.

It’s also considering moving headquarters out of London as part of the plan. The bank said in its report a decision would be made by year-end at the earliest.

HSBC is listed on the Hong Kong and London stock exchanges.