HSBC Holdings PLC chief executive officer John Flint delivered the kind of growth that investors have been waiting for.
Flint, who took over this year, oversaw third-quarter revenue gains that outpaced expenses. Adjusted revenue climbed 9 percent, while costs increased 2 percent. The shares in Hong Kong jumped after last week falling close to a two-year low.
The performance bolsters Flint’s case that he can deliver profit growth for HSBC while spending billions of dollars on an expansion into key Asian markets and technology upgrades.
Flint said the bank’s appetite to do business in other geographies including Saudi Arabia remains unchanged, despite the recent controversy over the murder of journalist Jamal Khashoggi.
HSBC’s Hong Kong shares rose as much as 5.6 percent after the announcement and were up 5 percent at 3:42pm local time.
Adjusted pretax profit at HSBC’s global banking and markets unit increased 21 percent to US$1.8 billion in the third quarter, compared with the US$1.6 billion average estimate of analysts surveyed by Bloomberg. HSBC has been making some changes at its investment bank and hired former top JPMorgan Chase & Co banker Greg Guyett to jointly run the global banking division.
“We had a little bit of difficult press around that business and some of that suggested that there was something wrong with the strategy,” HSBC director of finance Iain Mackay said in a telephone interview yeterday.
“It’s actually performing. We had a strong third quarter and just above everybody else,” Mackay said.
Flint, who replaced Stuart Gulliver as CEO this year, is pushing his strategy along with HSBC chairman Mark Tucker, who joined late last year. The new team wants to build out its presence in Hong Kong and China’s Pearl River Delta region. The lender is planning a hiring spree for its Asian wealth-management business.
HSBC, one of the most active global banks in Saudi Arabia, says interest in doing business in the kingdom will be unaffected by the furor over the alleged murder of Khashoggi.
“Longer-term impact on our appetite for Saudi Arabia, I don’t think it has any impact,” Flint said in a telephone interview. “It’s an important part of the global economy. In the emotion of the last few weeks, it’s been easy to forget that the world is very dependent on energy from Saudi Arabia and many other things.”
Flint joined chiefs of some of the world’s biggest banks in pulling out of an investment conference in Riyadh this month as pressure built on Saudi Arabia amid allegations it killed the dissident journalist.
However, the London-based lender was represented by Samir Assaf, head of its global banking and markets division.
The decision enabled HSBC “get to the right place,” Flint said and declined to comment on why he did not attend.
“It’s been a tough couple of weeks for the kingdom,” Flint said. “It’s been sad to watch this play out.”
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