Comments
HSBC saw pre-tax profit surge 32 per cent year-on-year in the third quarter on the back of lower fines, the banking giant announced today, but revenue dropped in the wake of Asian market volatility.
Group chief executive Stuart Gulliver said the performance was “resilient”, with pre-tax profit at $6.1 billion from $ 4.6 billion in the same quarter last year.
But revenue had been affected by stock market sell-offs in Asia and was down 4 per cent at $15.1 billion.
HSBC 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.
“Our cost-reduction measures are beginning to have an impact on our cost base,” Gulliver said, but added that there was more to achieve.
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.
“Whilst the target for completion of the review was initially set as by the end of 2015, this is a self-imposed deadline that can be moved should the Board require further work to be performed,” the report said.
The third-quarter 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.
“Their cost control had (previously) not really lived up to the target, but now it looks like they are finally in control.”
But Wong 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.”
The Chinese economy grew at 6.9 per cent between July and September this year, according to official figures, the slowest pace since the aftermath of the global financial crisis in 2009.
But many analysts believe China’s actual growth is significantly lower.
HSBC shares were slightly down in early afternoon trade at HK$60.9, a drop of 0.16 per cent.
HSBC’s rise in third-quarter pre-tax profits “reflected lower fines” and settlements, the report said.
But it added that adjusted operating expenses were up two percent year—on—year, partly due to investment in regulatory programmes and compliance.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.