HSBC Holdings reports 74% increase in Q3 profit

by Jonathan Adams
HSBC

The bank also announced a share buyback of up to $2 billion, as it continues to return excess capital to shareholders in place of investing the cash in its businesses

HSBC Holdings reported a 74% increase in Q3 profit, beating market expectations, as the bank released cash set aside for expected bad loans that have not materialised.

It also announced a share buyback of up to $2 billion, as it continues to return excess capital to shareholders in place of investing the cash in its businesses.

While we retain a cautious outlook on the external risk environment, we believe that the lows of recent quarters are behind us, Chief Executive Neil Quinn said in the results statement on Monday.

This confidence, together with our strong capital position, enables us to announce a share buyback of up to $2bln, which we expect to commence shortly, he said.

Quinn, who was confirmed in the role in 2020 just as the pandemic-induced economic crisis began, is betting on Asia to drive growth, by moving global executives there and ploughing billions into the lucrative wealth business.

The bank posted pretax profit of $5.4 billion for the quarter to September, compared with $3.1 billion a year earlier and the $3.78 billion average estimate of 14 analysts compiled by HSBC.

HSBC released $700 million in cash it had put aside in case pandemic-related bad loans spiked, as opposed to the same time a year ago when it took an $800 million charge in expectation of such soured debts.

In reality economic conditions have improved while loans have performed better than expected, the bank said.

The results from the bank come as rivals such as Citigroup are riding a Merger & Acquisition (M&A) boom, while fending off weakness in the lending business.

HSBC’s investment banking business however saw income drop compared to the same period a year ago as its global debt business in particular softened.



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