Archived article
Please note that tax, investment, pension and ISA rules can change and the information and any views contained in this article may now be inaccurate.
HSBC Holdings PLC on Tuesday reported a decline in profit and revenue in the third quarter, but the bank continues to remain positive for the full-year.
Shares in the Asia-focused lender were down 0.1% in Hong Kong on Tuesday at HK$42.05. They closed at 473.98 pence in London on Monday.
In the three months to September 30, HSBC reported pretax profit of $3.15 billion, down 42% from $5.40 billion a year before.
"We maintained our strong momentum in the third quarter and delivered a good set of results. Our strategy produced good organic growth in all three global businesses, and net interest income increased on the back of rising interest rates. We retained a tight grip on costs, despite inflationary pressures, and remain on track to achieve our cost targets for 2022 and 2023," Chief Executive Noel Quinn said.
Net interest income improved to $8.58 billion from $6.61 billion, but net fee income fell to $2.78 billion from $3.32 billion. Net insurance premium income slipped to $2.66 billion from $2.72 billion. As a result, revenue decreased by 3.2% to $11.62 billion from $12.01 billion.
HSBC explained that its third quarter results included a $2.4 billion impairment, following the reclassification of its retail banking operations in France to held-for-sale, as well as a net charge for expected credit losses and other credit impairment charges, compared with a net release in third quarter of 2021.
However, net interest margin improved to 1.57% from 1.19% year-on-year
Its cost efficiency ratio was 68.7% in the third quarter, compared to 66.5% a year earlier.
HSBC's CET1 ratio ended September 30 CET1 at 13.4%, down from 15.9% a year ago.
Turning to the bank's business units, HSBC's Wealth & Personal Banking adjusted pretax profit rose to $2.41 billion from $1.90 billion, while Commercial Banking profit increased to $2.06 billion from $1.97 billion and Global Banking & Markets adjusted profit rose to $1.53 billion from $1.42 billion.
Regionally, HSBC's Asia operation continue to be its profit driver.
Statutory pretax profit in Asia rose to $3.51 billion from $3.30 billion a year earlier, whilst in Europe profit swung to a loss of $1.57 billion from $1.14 billion profit. Profit in the Middle East & North Africa improved to $493 million from $378 million. Profit in North America rose to $460 million from $358 million. In Latin America, profit increase to $248 million from $222 million.
In the first nine months of 2021, HSBC's group pretax profit fell to $12.32 billion from $16.24 billion, while revenue slipped to $36.85 billion from $37.56 billion.
Looking ahead, HSBC said: "Our outlook on revenue remains positive and we have upgraded our net interest income guidance for 2022 to $32 billion, based on the current market consensus for global central bank rates.
"In 2023, we now expect net interest income of at least $36 billion, with the reduction from the at least $37 billion guidance provided at our interim results reflecting the impact of sterling depreciation against the US dollar and a higher cost of funding in our trading book. We continue to monitor the expected path of interest rates. This is expected to be supported by low-single-digit percentage lending growth."
Copyright 2022 Alliance News Limited. All Rights Reserved.