HSBC Holdings PLC yesterday said pretax profit slipped more than 40 percent in the third quarter, citing an impairment on the planned disposal of its retail banking operations in France.
However, results were better than analyst estimates and were boosted by rising interest rates making lending more profitable.
The Asia-focused giant said pretax profit fell by US$2.3 billion to US$3.1 billion year-on-year, while net profit dropped 46 percent to US$1.91 billion.
Photo: Reuters
In a statement to the Hong Kong stock exchange, HSBC said it was looking to offload its French retail arm “as part of our actions to simplify our operations” in Europe, adding that it hoped the sale would go through in the second half of next year.
While reclassifying the French division, the bank “recognized an impairment of US$2.4 billion,” which affected the third-quarter figures, but adjusted pretax profit rose 18 percent to US$6.5 billion, beating analysts’ estimates.
The bank’s net interest income, which measures what it makes from lending minus interest paid on deposits and is a key measure of profitability, came in at US$8.6 billion, its best third quarter in more than eight years.
“Macroeconomic headwinds, including higher inflation and a weaker outlook, continue to weigh on the global economy,” HSBC said, adding that it had set aside more provisions against bad loans and had expected credit losses of US$1.1 billion for July to last month.
The bank specifically cited global uncertainty sparked by Russia’s invasion of Ukraine, the fall of the pound in Britain and the grim condition of China’s real-estate sector.
However, HSBC chief executive Noel Quinn said the bank was focused on delivering a returns target of at least 12 percent for next year, as well as keeping costs down.
“We retained a tight grip on costs, despite inflationary pressures, and remain on track to achieve our cost targets for 2022 and 2023,” he said in the earnings report.
HSBC is headquartered in London, but makes the vast majority of its profits in Asia, especially in China and Hong Kong.
Senior executives from the bank are expected to be in Hong Kong next week for a bankers’ summit that is being hosted by the territory, which only last month lifted mandatory quarantine for all international arrivals.
HSBC has vowed to accelerate a multi-year pivot to Asia and the Middle East, with ambitions to lead Asia’s wealth management market.
The bank said it would invest US$6 billion in Hong Kong, China and Singapore and hire more than 5,000 wealth advisers, while slashing 35,000 jobs and cutting less profitable operations in other markets, including France and the US.
Taiwan’s foreign exchange reserves fell below the US$600 billion mark at the end of last month, with the central bank reporting a total of US$596.89 billion — a decline of US$8.6 billion from February — ending a three-month streak of increases. The central bank attributed the drop to a combination of factors such as outflows by foreign institutional investors, currency fluctuations and its own market interventions. “The large-scale outflows disrupted the balance of supply and demand in the foreign exchange market, prompting the central bank to intervene repeatedly by selling US dollars to stabilize the local currency,” Department of Foreign
Intel Corp is joining Elon Musk’s long-shot effort to develop semiconductors for Tesla Inc, Space Exploration Technologies Corp and xAI, marking a surprising twist in the chipmaker’s comeback bid. Intel would help the Terafab project “refactor” the technology in a chip factory, the company said on Tuesday in a post on X, Musk’s social media platform. That is a stage in the development process that typically helps make chips more powerful or reliable. The chipmaker’s shares jumped 4.2 percent to US$52.91 in New York trading on Tuesday. The Terafab project is a grand plan by Musk to eventually manufacture his own chips for
Some robotaxi passengers were left stranded in the middle of fast-moving traffic in a major Chinese city after their driverless vehicles stopped running, according to police and media reports on Wednesday. A preliminary investigation indicates more than 100 robotaxis came to a halt because of a “system malfunction,” police in the city of Wuhan said in a statement, without elaborating. No injuries were reported. One passenger told Chinese media that their robotaxi stopped after turning a corner. An instruction on a screen read: “Driving system malfunction. Staff are expected to arrive in 5 minutes.” After no one showed up, the passenger pushed
Taiwan Power Co (Taipower, 台電) yesterday said it plans to resume operations at two coal-fired power generators for three months to boost security of electricity supply as liquefied natural gas (LNG) supply risks are running high due to the Middle East conflict. The two coal-fired power generators are at Mailiao Power Plant in Yunlin County’s Mailiao Township (麥寮). The plant, operated by Formosa Plastics Group (台塑集團), supplied electricity to Taipower’s power grid until the end of last year. Taipower’s decision came about one month after Minister of Economic Affairs Kung Ming-hsin (龔明鑫) on March 10 said that the nation had no imminent
RSS