Pre-tax profit soars at HSBC

HSBC posted a five-fold rise in its pre-tax profit for the third quarter, as the bank expanded its market share in its key businesses in Asia, and helped by a lower comparative base in the year-ago quarter.

HSBC this month chose veteran John Flint as its next chief executive, with its newly arrived chairman promoting an insider to drive revenue growth. Mr Flint will take over as CEO next February.

The bank’s reported pretax profit was US$4.6 billion in the September quarter, up from $843 million in the same period a year ago, HSBC said in a stock exchange filing. The profit was about in line with analyst estimates of $4.7bn.

The year-ago profit was significantly affected by a one-off loss of $1.7bn from the sale of its Brazilian unit, and adverse foreign currency movements.

HSBC has grown its revenue again following a period of wider restructuring after the 2008 global financial crisis that included scaling back its empire and shifting its focus eastwards.

Reported pre-tax profit for Asia rose 10 per cent during the quarter to $4bn.

“Our international network continued to deliver strong growth ... and our pivot to Asia is driving higher returns and lending growth, particularly in Hong Kong,” said the HSBC Group chief executive Stuart Gulliver.

HSBC has boosted its capital buffer despite rolling out share buybacks, the latest of up to $2bn in July, and sustaining dividends, showing it is ahead on its turnaround strategy.

The bank makes more than half of its profits in Asia, and its regional pivot is centred around China’s Pearl River Delta region with billions in investment commitments and plans to bolster its retail and wealth management business.