Profits boost after retail banking grows
HSBC banked a 28 per cent rise in quarterly profit helped by bringing costs down and growing revenues in its key Asian markets.
Europe’s biggest bank by assets posted a third-quarter pre-tax profit of $5.92billion (£4.6billion) on 6 per cent higher revenue of $13.8billion on the back of strong growth in its retail banking, wealth management and commercial banking operations.
Profits from its Asian business, which generate about three-quarters of group earnings, were up 11 per cent to $4.46billion. HSBC showed further signs of bringing costs under control as operating expenses fell by 7 per cent.
Revenue is not rising above costs, a trend known as “positive jaws”, but chief executive John Flint said the bank is on course to swing to positive by the end of the year.
Flint played down the likely impact on foreign trade and investment in Saudi Arabia after the killing of Jamal Khashoggi, and said trade tensions between the US and China were not yet showing through. He said: “These are encouraging results that demonstrate the revenue potential of HSBC. We are doing what we said we would, delivering growth from areas of strength and investing in the business while keeping a strong grip on costs.” Shares rose 28¾p to 633¾p. Laith Khalaf at Hargreaves Lansdown said: “What’s positive is that profit growth is coming from a rising top line rather than simply cost-cutting, which can only deliver results for so long. Being plugged into the fortunes of China and the surrounding area looks like an ace in the sleeve.”