HSBC has hailed the success of its drive to achieve rapid growth in Asia after unveiling a 450 per cent leap in third quarter profits.
The banking giant made $4.6 billion (£3.5bn) before tax in the three months to September compared with $0.8bn last time.
Profits fell slightly excluding one offs following an increase in operating costs, including performance related pay.
However, chief executive Stuart Gulliver said the London-based firm had maintained good momentum.
“Our international 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,” said Mr Gulliver.
HSBC said the shift to Asia generated over 70 per cent of the group’s underlying profit in the first nine months of this year.
The results appear to underline the benefits that HSBC enjoys as a result of its exposure to the fast-growing economies of the region.
They may be regarded with envy by UK-focused lenders such as Bank of Scotland-owner Lloyds Banking Group amid concerns about the outlook for the country’s economy.
HSBC made a $202m loss in the third quarter in the UK, compared with a $1.8bn deficit in the same period last year.
The company is grappling with challenges posed by the Brexit vote for the UK to leave the European Union and regulatory changes.
The Scot who is finance director of HSBC, Iain Mackay, said the bank still expects to transfer up to 1,000 employees from the UK to Paris in response to Brexit.
“It may be less than 1,000 employees that we will transfer, but it is up to 1,000 and that guidance remains very consistent,” the Aberdeen university business studies and accounting graduate told reporters.
He said the moves will be made in coming quarters. The timing will be largely informed by the terms and conditions associated with Brexit.
HSBC incurred $8m costs associated with the UK’s exit from the EU in the third quarter and $101m in respect of work to ring-fence its retail bank in the country. The retail business will be based in Birmingham.
HSBC has more than 4,000 employees in Scotland, out of a total of 233,000.
In June the bank announced plans to create a further 500 jobs in its global risk and customer services operations in Scotland.
Highlighting a strong performance by its retail banking and wealth management operation in the third quarter yesterday, HSBC noted it increased lending and deposits in the UK, Hong Kong and Mexico.
Mr Mackay said the bank’s credit standards are robust and the outlook remains stable.
Sector watchers have expressed fears that an increase in interest rates in the UK could cause problems for many borrowers.
But HSBC noted it has grown its UK mortgage book while maintaining “extremely conservative” loan to value ratios.
Mark Tucker succeeded Glasgow-born Douglas Flint as chairman of HSBC on 1 October, after spending years in senior positions in Asia.
Mr Gulliver will be succeeded in February by John Flint, head of HSBC’s retail and wealth management arm.
HSBC’s adjusted operating profit fell to $5.44bn in the third quarter from $5.52bn last time.
Adjusted operating expenses increased to $7.8bn from $7.2bn. HBSC said the increase primarily reflected investments in business growth programmes, particularly in retail banking and wealth management, and an increase in performance-related pay.
The cost of customer redress programmes in the UK fell to $84m from $456m.
Mr Gulliver said the bank remained on track to achieve around $6bn of annualised cost savings by the end of the year, under the strategy it launched in 2015.
Laith Khalaf, senior analyst, at the Hargreaves Lansdown investment firm said: “The headline growth seen by HSBC over the last year is heavily skewed by the sale of its Brazilian operations in 2016, so the adjusted numbers give us a much better idea of what’s going on.”
Shares in HSBC closed down 11.3p at 737p.
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