The Sun (Malaysia)

HSBC Q3 pre-tax profit surges 30% but revenue drops

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HONG KONG: Global banking giant HSBC saw pretax quarterly profit surge almost a third on the back of lower fines, beating market expectatio­ns, but turnover slid amid market volatility.

Earnings before taxation jumped 32% to US$6.1 billion (RM26.23 billion) in the third quarter or three months to the end of September, from US$4.6 billion in the same period last year, HSBC said in a results statement yesterday.

“Our third quarter performanc­e was resilient against a tough market backdrop,” said chief executive Stuart Gulliver.

Revenue was adversely affected by fierce stock market sell-offs in Asia, and fell 4% to US$15.1 billion in the reporting period.

Gulliver noted that “the stock market correction in Asia” had weighed on HSBC’s Principal Retail Banking & Wealth Management division, and on its Global Banking & Markets unit.

The Q3 results beat analysts’ expectatio­ns, with some saying cost reductions are now reaping rewards.

“This time the earnings were pretty impressive,” said Jackson Wong, associate director for Simsen Financial Group. But he added it would be a long road before revenue growth resumes.

“When we look at growth, it’s still limited ... hopefully if China’s economy picks up steam then it will help emerging markets in Asia.”

HSBC’s rise in third-quarter pre-tax profit “reflected lower fines” and settlement­s, the report said. But it added that adjusted operating expenses were up 2% year-on-year, partly due to investment in regulatory programmes and compliance.

HSBC was fined late last year by US and British regulators for attempting to rig foreign exchange markets.

HSBC had announced in June it would cut its global workforce by up to 50,000 and sell off its businesses in Brazil and Turkey to cut costs.

The bank is also considerin­g moving its headquarte­rs from Britain but said there was a “considerab­le amount of work still to do” before a decision is made. – AFP

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