HSBC shares rally on positive results
ABOVE EXPECTATIONS: Adjusted pre-tax profit jumps 7pc
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 pre-tax profit — which strips out one-off items and unfavourable currency movements — rose seven per cent from a year earlier to US$5.59 billion (RM23.53 billion), beating analysts’ expectations.
Reported pre-tax profit, however, fell 86 per cent from a year earlier to US$843 million, which included the impact of the bank’s Brazil business sale, which set it back US$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 US$204 million for the three-month period, reversing a year-earlier net profit of US$5.23 billion.
HSBC last year announced a radical HSBC has achieved
to reach its target end of next year. overhaul to cut annual costs by US$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 US$2.8 billion in annualised savings so far and was on track to reach its target end of next year.
The bank’s balance sheet showed it continued to downsize in the United States, selling US$900 million
so far and is worth of consumer and mortgage lending assets.
Like most global banks, HSBC has been struggling to boost profits as China’s economy slows and uncertainty caused by Britain’s looming exit from the European Union casts a shadow over the sector.
On top of that, it has been grappling with stricter capital rules, low interest rates and scandals stemming from its own misbehaviour. AFP