HSBC banks increased third quarter profits
HSBC cited growth in current accounts, savings and deposits.
HSBC has reported a rise in third quarter profit, driven by a strong showing from its retail and wealth management units.
The lender booked a 28% increase in profit before tax to 5.9 billion US dollars (£4.5 billion) in the three months to September 30, reflecting strong revenue growth and lower operating expenses.
These are encouraging results that demonstrate the revenue potential of HSBC HSBC chief executive John Flint
The results, which beat expectations, also showed that on an adjusted basis, pre-tax profit jumped 16% to 6.2 billion US dollars (£4.8 billion).
New chief executive John Flint, who took over as top dog in February, 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.
“We remain committed to growing profits, generating value for shareholders and improving the service we offer our customers around the world.”
HSBC cited growth in current accounts, savings and deposits while wealth management saw higher investment revenue, reflecting increased investor confidence.
The lender has been grappling with cost control, and showed some success on that front, reporting a 7% fall in operating expenses for the period.
HSBC is Europe’s biggest bank, but earns most of its profits from Asia.
Last year, it completed a corporate overhaul to raise profitability by focusing more on high-growth Asian emerging markets while shedding businesses and workers in other countries.
HSBC’s London shares were up over 4% in morning trade to 633p.
Laith Khalaf, senior analyst at Hargreaves Lansdown, said: “HSBC may be the second biggest company on the UK stock market, but its profits are predominantly emanating from its historic home in the far east. Three quarters of the bank’s profits so far this year have come from its Asian operations, leaving the European business trailing in its wake.
“Profit growth has been broad-based across HSBC’s main banking activities, and what’s positive is that’s coming from a rising top line rather than simply cost-cutting, which can only deliver results for so long.
“HSBC is clearly plugged into the global economy, and in particular the fortunes of China and the surrounding area. While in the long term this looks like an ace in the sleeve, investors should expect a bumpy journey, particularly if Trump’s trade war dents growth in the region.”