HSBC third-quarter pretax profit up 32 percent on lower regulatory costs
HONG KONG – HSBC reported a better than expected 32 percent rise in pretax profit for the third quarter, thanks to reduced costs from fines and settlements with regulators as heavy spending on compliance by Europe’s biggest bank begins to take effect.
The earnings update gives investors a first chance to check on progress on the 10 goals HSBC’s management set itself in June, including reducing risk-weighted assets by 25 percent, selling operations in Turkey and Brazil and cutting $4.5-5 billion in costs.
HSBC said its total spending on regulatory programmes and compliance rose to $2.2 billion in the first nine months of the year, up 33 percent from the same period last year.
Those efforts have begun to take effect, the bank said, with fines, settlements and costs from consumer redress in the UK down $1.4 billion from the third quarter of last year.
The bank’s pretax profit was $6.1 billion, up from $4.6 billion in the same period a year ago, HSBC said in a Hong Kong stock exchange filing on Monday. That was more than the consensus estimate of $5.2 billion, based on the average of analysts’ forecasts compiled by the bank.
The bank reported that adjusted revenues fell 4 percent to $15.1 billion compared with the same quarter last year, hit by plunging stock markets in Asia. -Reuters