HSBC profit surges to $5.9b in third quarter

Adjusted pre-tax profit for the lender climbed 16 per cent year-on-year to $6.2 billion, reflecting revenue growth that was partly offset by a rise in operating expenses.

Banking giant HSBC on Monday said its pre-tax profit jumped 28 per cent to $5.92 billion in the third quarter on "strong revenue growth".
Adjusted pre-tax profit for the London-headquartered lender climbed 16 per cent year-on-year to $6.2 billion, reflecting revenue growth that was partly offset by a rise in operating expenses, the bank said.
The underlying figure beat analysts' consensus estimate of $5.73 billion, according to Bloomberg. "The strong revenue environment continues to enable us to invest in growth and in the simplification of the organisation to make it easier for our customers to bank with us and for colleagues to do their jobs," said chief executive John Flint, in the top job since February.
HSBC's share price jumped 4.2 per cent to 630.40 pence in morning deals on London's benchmark FTSE 100 index, which was up 0.8 per cent overall. "Europe's largest bank HSBC has put out an impressive set of third quarter numbers," noted Russ Mould, investment director at AJ Bell. "Costs were tightly controlled, and the company has made market share gains in its core Asian market.
"It is getting the basics of banking right, attracting a larger number of customer deposits in the period. The company's investment banking arm is also performing better than several of its peers," Mould added.
Adjusted revenue climbed almost nine per cent to $13.84 billion in July-September compared with the third quarter of 2017.
The Asia-focused banking giant has been on a recovery and huge restructuring drive in recent years to streamline the business.
Flint said in June that he plans to invest up to $17 billion primarily in growth and technology projects, with a particular focus on accelerating business in Asia.
He was promoted to the top post after serving as the lender's head of retail banking and wealth management.
On the US-China trade conflict, Flint told a conference call Monday that "there is nothing really in the (HSBC) numbers yet as evidence of stress arising from the trade spat".
He added: "Clearly customers are a little bit more aware and anxious with the issues" being played out between the world's two biggest economies.
After some strong profitable years under previous CEO Stuart Gulliver before his retirement, HSBC earnings plunged in 2016 on huge writedowns and restructuring charges.
However, they rebounded strongly last year, in part thanks to a strong Asian performance.
Prior to his departure, Gulliver said the bank would likely switch 1,000 jobs to Paris from London owing to Britain's departure from the European Union due next year.
But after wide-ranging cutbacks that saw 50,000 jobs axed in an overhaul announced in 2015, the bank is now planning to hire again as it seeks new growth areas.
Earlier this month, HSBC agreed to pay $765 million in a US settlement to resolve allegations it passed on toxic mortgage securities to investors prior to the global financial crisis.
HSBC, founded in Hong Kong and Shanghai in 1865, sees its focus firmly in Asia, although it has been based in Britain since 1992.  
Khashoggi event has no impact
Saudi Arabia is unlikely to see significant impact on its foreign trade and investment flows following the killing of journalist Jamal Khashoggi, the chief executive of Europe's biggest bank HSBC said on Monday.
"It has been a difficult few weeks for the kingdom, this has not been good for Saudi Arabia," HSBC CEO John Flint told Reuters in an interview.
"I understand the emotion around the story, but it is very difficult to think about disengaging from Saudi Arabia given its importance to global energy markets," he said.