Asia focus helps HSBC quadruple profits

HSBC third-quarter profits up five times

HSBC third-quarter profits up five times

"Our global network continued to deliver strong growth in the third quarter, and our pivot to Asia is driving higher returns and lending growth, particularly in Hong Kong".

It reported net income of almost US$3 billion, swinging from a loss of US$617 million the previous year as revenue climbed 38 percent to US$13.2 billion.

"Our worldwide network continued to deliver strong growth in the third quarter, and our pivot to Asia is driving higher returns and lending growth, particularly in Hong Kong", Gulliver said in a statement.

"I think on a year-on-year basis there will be multiple jumps on profit because of the low base last year, which was, in turn, caused by a one-off expense last year".

Its customer base for retail banking and wealth management in mainland China had expanded by more than 70 percent so far this year, it said.

However, adjusted quarterly revenue rose 2% to $13bn, exceeding consensus forecasts as the bank received a boost from higher deposit income. The area represented 87% or close to 4$ billion of the profit before taxes of the bank for the third quarter, and is what makes the bank different from its peers across Europe, said an industry analyst.

HSBC was founded in Hong Kong in 1865 and is headquartered in London.

Adjusted pre-tax profits fell marginally by $0.1bn to $5.4bn, but over the first nine months of the year they were still up 8pc at $17.4bn.

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HSBC reported a near five-fold rise in third quarter profits, as the banking giant pushed forward with its cost cutting programme and benefited from its pivot to Asia.

The latest financials for HSBC showed again that the ability of the company to rise again following the worldwide financial crisis, as well as shifting its focus toward Asia, the bank scaled bank certain parts of tis operations including selling its business in Brazil.

Gulliver, instrumental in that turnaround, will step down as CEO in February next year. Flint moves into the top spot after working as head of HSBC's retail and wealth management arm.

He added: "Although operational performance at HSBC is clearly improving, we believe that the shares have already run well ahead of what can be justified by current estimates and are already factoring in significant upgrades with returns well in excess of management targets".

This will help bolster the bank's CET1 ratio and will also support further share buybacks, which has buttressed its share price in recent months.

The bank has made expanding in China's fast-growing Pearl River Delta region a key strategy.

That is expected to continue or accelerate under HSBC veteran and incoming CEO Flint, who spent much of his early career in Asia, alongside new chairman Mark Tucker, who has also worked extensively in the region.

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