LONDON (Alliance News) - HSBC Holdings PLC on Monday reported higher third-quarter pretax profit, and offered reassurance over its Asian credit quality amid fears about China's economic slowdown and market volatility in the region.
Pretax profit rose to USD6.10 billion in the three months to September 30, from a USD4.61 billion pretax profit in the corresponding quarter the prior year. Adjusted for currency translation and significant items, pretax profit was down to USD5.51 billion from USD6.42 billion.
Third-quarter revenue was down to USD15.09 billion from USD15.78 billion. Impairment charges for bad loans and other credit risk provisions, after being adjusted for currency translation, were up 15% to USD638 million. Adjusted operating expenses, which strip out significant items, charges for settlements and provisions over legal matters, and customer redress in the UK, were up 2.3% to USD8.58 billion.
The latest quarterly figures mean that HSBC's pretax profit for the first nine months of 2015 was up 16% year-on-year to USD19.73 billion. Dividends per share for the nine months were flat on the prior year at USD0.30.
HSBC used to have an appetite for being the world's local bank, which led to more than 100 acquisitions between 1999 and 2010. The following year, Stuart Gulliver, then the newly appointed group chief executive, set out a new strategy that would change the way HSBC looked in a big way.
HSBC has since sold more than 78 businesses, shifted to a centralised, global structure from a country-head approach, and cut costs. Four years from introducing his first strategy to investors, Gulliver in June 2015 revealed a new plan to cut up to USD5.0 billion from HSBC's annual costs by 2017 and pivot further to Asia.
CEO Gulliver said on Monday that HSBC, which makes most of its money in Asia, was resilient in the recent quarter against a tough market backdrop.
"Despite slowing growth in the mainland Chinese economy and market volatility in Asia, there has been no visible impact on our Asian credit quality in the third quarter of 2015," Gulliver said.
Gulliver said that revenue was down as the fall in the stock market in Asia hit HSBC's principal retail banking and wealth management division, while revenue in the group's investment bank, global banking and markets, also was lower.
Meanwhile, HSBC said its ongoing review of whether to shift its headquarters from London to a new location could take longer than previously expected.
"Whilst the target for completion of the review was initially set as by the end of 2015, this is a self-imposed deadline that can be moved should the board require further work to be performed," HSBC said.
"An announcement will be made when the board makes its final decision and, if necessary, a further update will be provided at the time of the full year results announcement," the bank added.
In a statement issued later on Monday, HSBC said it has partnered with Shenzhen Qianhai Financial Holdings Co Ltd to create a joint venture securities business based in China's Guangdong Province.
"HSBC is delighted to have the opportunity to partner with Shenzhen Qianhai Financial Holdings.
This joint venture is further evidence of HSBC?s determination to be part of China?s economic development, grow our business in the Pearl River Delta and throughout the country and support the innovative approach to reform and liberalisation that policymakers are undertaking," said Chief Executive Stuart Gulliver.
Shares in HSBC were down 1.0% to 502.40 pence on Monday.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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