HSBC Swings to Profit as Pivot to Asia Pays Off -- Update
October 30 2017 - 5:05AM
Dow Jones News
By Margot Patrick and Joanne Chiu
HSBC Holdings PLC swung to a third-quarter net profit, as
revenue in Asia rose from increased customer borrowing and a
growing deposit base.
The U.K. banking giant on Monday reported a $3.24 billion net
profit for the period compared with a net loss of $204 million in
the same quarter last year, on revenue up 36% to $12.98 billion. On
a pretax basis, the bank's profit surged to $4.62 billion from $843
million a year ago.
Chief Executive Stuart Gulliver said the bank's international
network continued to deliver strong growth in the third quarter,
and its pivot to Asia is driving higher returns and lending growth,
particularly in Hong Kong. The bank this month named retail head
John Flint as its next chief executive, signaling continuity in the
Asia-focused bank's strategy.
Asia loans and advances grew 17% in the three months to Sept.
30, compared with the third quarter of 2016. Asia customer deposits
were $10.1 billion higher than at June 30. Across the bank, revenue
on retail deposits rose to $1.61 billion from $1.3 billion in the
third quarter of 2016.
The third-quarter results come after HSBC in late July reported
a 57% rise in net profit of $3.87 billion for the second quarter
amid improving loan growth and rising contribution from its other
businesses. The profit growth has helped the bank accrue surplus
capital, and it has been returning some of it to shareholders by
buying back shares.
In an interview, finance chief Iain Mackay said the bank still
has around $10 billion of extra capital tied up in its
subsidiaries, including around $6 billion in the U.S. He said
further buybacks would be considered, "when the time is
appropriate." Local regulators must approve capital moving up to
the group level.
The bank said it's on track to meet most of its strategy targets
announced in 2015 that are due to be completed by the end of this
year. The bank is expected to announce a refined strategy after Mr.
Flint starts as CEO in February.
Write to Margot Patrick at margot.patrick@wsj.com and Joanne
Chiu at joanne.chiu@wsj.com
(END) Dow Jones Newswires
October 30, 2017 04:50 ET (08:50 GMT)
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