HSBC profits plunge £4.2bn after losses on Brazil bank

HSBC’S profits have plunged after it sold off its Brazilian business.

The bank made £678.4m in the three months to September 30, down from £4.9bn a year earlier.

This fall was largely due to a loss on the sale of its Brazil operation to Banco Bradesco in July.

Some £367.1m was also set aside to compensate customers for the PPI mis-selling scandal.

Ignoring these and other oneoff costs, the bank’s profits were up 7pc to £4.5bn – beating experts’ predictions.

Laith Khalaf, of investment firm Hargreaves Lansdown, said: ‘HSBC’s results show you can’t make an omelette without breaking eggs. The bank’s efforts to refocus on its Asian roots have weighed down reported profits this quarter.

‘However, the underlying business numbers from HSBC were pretty positive, with costs and revenues both heading in the right direction.’

Shares rose 4.6pc, or 27.5p, to 622.3p as the City cheered the results. HSBC announced a flat third-quarter dividend of $0.10 per share.

The bank said it had taken a £563m hit from currency movements since the start of the year, including the pound’s fall after the Brexit vote.

Chief executive Stuart Gulliver was one of the most vocal voices in finance about the supposed perils of leaving the European Union, saying it could prompt the bank to move 1,000 jobs to Paris.

He has since played down the prospect and yesterday stressed there would be no immediate changes.

Because HSBC has a bank in France, it will be able to move operations abroad relatively quickly if required.

‘We don’t have to make any decisions at this moment,’ Gulliver said. ‘The best thing we can do is give the Government space and time to negotiate the best possible outcome.’

Gulliver – who called for more clarity around the status of EU nationals employed in Britain – also said the nation’s economy seemed to be performing well.

Activity by small and medium firms had picked up after a two-month lull following the referendum, he said.