By Mark Williamson

BANKING giant HSBC has underlined the scale of the boost provided to lenders’ profitability by interest rate increases as it posted strong third quarter results.

However, shares in HSBC fell around six per cent after the group announced the surprise exit of chief financial officer Ewen Stevenson.

HSBC said Mr Stevenson would be succeeded by Georges Elhedery, co-head of the group’s global banking and markets business, as part of its long-term leadership succession planning process.

The news comes as HSBC grapples with the challenges posed by the uncertain outlook for the global economy and faces pressure for a break up from its biggest shareholder, Ping An

AJ Bell financial analyst, Danni Hewson said: “Stevenson had a good track record in his previous job helping to rehabilitate NatWest (formerly Royal Bank of Scotland) and shareholders will be disappointed not to have his steady hand at the tiller during the current turmoil.”

He reckons Mr Stevenson’s departure may also make HSBC more vulnerable to pressure from Ping An, which wants the bank to separate its operations in Asia from those in western economies, such as the UK.

However, HSBC said it was well placed to accelerate its financial performance and deliver strong returns for shareholders after making big changes in the last three years. These included last year’s decision to exit the US retail business.

Chief executive Noel Quinn said Mr Stevenson had made a thoughtful and significant contribution through a period of considerable change.

“He has been instrumental in materially repositioning the Bank’s strategy and performance, whilst also transforming the Finance function,” said Mr Quinn of the New Zealander.

Mr Quinn said the bank had maintained its strong momentum in the third quarter and delivered a good set of results.

HSBC made $6.5 billion (£5.7bn) underlying pre-tax profit, up from $5.5bn. Analysts had expected it to make around $6bn.

“Our strategy produced good organic growth ...and net interest income increased on the back of rising interest rates,” said Mr Quinn.

Central banks around the world have raised rates to help curb inflation. Lenders such as HSBC have been able to raise the rates they charge by more than their funding costs have increased.

HSBC’s operations cover wealth management and personal banking, commercial banking and global markets.

The bank said its outlook on revenue remains positive.

Gary Greenwood at Shore Capital noted that guidance regarding impairments and growth in the loan book was “a little more cautious” than previously and that the bank expected foreign exchange movements to weigh on earnings.

HSBC said: “Recent economic policy in the UK caused the value of sterling to fall and yields on government securities to rise sharply, increasing uncertainty around the path of future Bank of England policy rates.We are closely monitoring the impact of these developments and any implications on our business.”

HSBC has closed several branches in Scotland in recent years, leaving it with six in the country.

The bank noted headwinds related to the ongoing impact of the pandemic and the war between Russia and Ukraine but said credit indicators in its wholesale and retail portfolios remain relatively benign against historical levels.

Shares in the group closed down 32.45p at 442.65p.

Mr Stevenson joined HSBC in 2018 after four years at Royal Bank group, which changed its name to NatWest in 2020. He said it had been a privilege to be part of the senior team leading a fundamental turnaround of HSBC’s operating performance. Mr Stevenson will step down as CFO on December 31 and leave HSBC in April. Mr Quinn said Mr Elhedery is an exceptional leader.