Economy

HSBC posts huge jump in third quarter pre-tax profit

Reported pre-tax profit jumped to $4.6 billion in the three months to the end of September, compared with $843 million over the same period in 2016.

Further, the company said it remains on track to achieve around $6 billion of annualised cost savings by the end of the year.

The bank's continued bet on Asia, one of the world's fastest growing economic regions, has been part of its strategy to expand the business and make up for losses elsewhere. "Our worldwide network continued to deliver strong growth in the third quarter, and our pivot to Asia is driving higher returns and lending growth, particularly in Hong Kong".

"Our global network continued to deliver strong growth in the third quarter, with all of our transaction banking products benefiting from higher balances and interest rate rises", the lender said. In a statement to the Hong Kong stock exchange the bank said that its "pivot to Asia" had driven over 70 per cent of the group's adjusted profit in the first nine months of this year. There was also 17% growth in lending in the area during the third quarter versus the year before.

HSBC's common equity tier 1 ratio - a measure of financial strength - was 14.6 percent at the end of September, slightly lower than 14.7 percent at end-June this year, but in-line with analyst expectations.

"We've got good momentum, we're seeing good investor appetite for new business coming through not only in Hong Kong but further afield in Asia", Group Finance Director Iain Mackay told Reuters.

Excluding significant items and an adverse effect of foreign currency translation of $0.1 billion, revenue increased by 3%, aided by growth in loans and advances, HSBC Holdings added.

Net adjusted profits at HSBC's retail banking and wealth management division were up 11 per cent in the third quarter from a year earlier.

"Retail Banking and Wealth Management had a good quarter, with strong revenue growth from current accounts, savings and deposits, and further growth in loans and deposits in Hong Kong, the United Kingdom and Mexico".



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