Global banking giant HSBC said on Monday that pre-tax profits climbed in the third quarter despite loan write-offs in the US rising to US$4.3 billion.
The British-based group added that its Asian operations “delivered results well ahead” of the third quarter last year. HSBC is seeking more growth in Asia, its traditional stronghold, and other emerging markets and last month bought nearly 90 percent of Bank Ekonomi in Indonesia for US$607.5 million.
HSBC chief executive Michael Geoghegan said the group’s results reinforced “the importance of maintaining focus on HSBC’s core strengths of sound liquidity, capital strength, cost discipline and relationship banking built on harnessing the global capabilities of the group.
“These are times which underscore more strongly than ever the importance of delivering value to our customers as the industry adapts to slower growth and a changing regulatory environment,” Geoghegan said in the bank’s trading update.
HSBC said that loan impairment charges in the US rose by US$700 million from the second quarter.
Amid “unprecedented turbulence” in financial markets, the bank also noted that write-downs on credit trading positions in the third quarter stood at US$600 million, lower than in the second quarter.
HSBC said its pre-tax profit for the third quarter was ahead of the equivalent period in last year. However pre-tax profits fell over the first nine months of this year.
“Continuing uncertainties lie within the financial system itself as it is still unclear whether there are further risk concentrations to be uncovered within the sector as the system de-leverages and economies slow,” it said.
Meanwhile, in Hong Kong trading yesterday, HSBC dropped 4.7 percent. It’s shares fell 4.7 percent to HK$88 (US$11.35).
”A global positioning exposes the group to a global recession,” wrote JPMorgan Chase & Co analysts Sunil Garg and Carla Antunes da Silva in a note yesterday cutting their share-price estimate by 25 percent to HK$82.
They maintained an “underweight” rating on the stock.
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