HSBC profits surge on lower costs
The figure for the third quarter beat forecasts of $5.2bn and meant profits were up 32 per cent compared with the same time last year.
The bank said it was aided by ongoing cost-cutting plans as well as lower outlays for regulatory fines. HSBC said these regulatory costs were $1.4bn lower than the third quarter of 2014.
Chief executive Stuart Gulliver said: “Our cost-reduction measures are beginning to have an impact on our cost base.
“There is more to achieve on costs and we expect the measures we have already taken to have a further impact in the fourth quarter.”
While profits were up sharply, overall revenue dipped 4 per cent to $14bn, which Mr Gulliver attributed to the stock market correction in Asia.
“Despite slowing growth in the mainland Chinese economy and market volatility in Asia, there has been no visible impact on our Asian credit quality,” he added.
Earlier this month HSBC imposed a 10 per cent pay cut on its contractors and asked them to take two weeks’ unpaid holiday as part of its cost-cutting measures.
The move is centred on the lender’s global banking and markets investment banking division based in London, and is expected to affect hundreds of workers, from IT staff to analysts and others on fixed-term contracts.
It has also revealed plans to cut 50,000 jobs globally over the next two years.
The bank said the moves are aimed at saving up to $5bn by the end of 2017.
HSBC is expected to decide whether to move its headquarters out of the UK by the end of this year at the earliest, with Hong Kong seen as the most likely alternative.
The bank is pressing ahead with measures to relocate the head office of its UK retail banking operations from London to Birmingham by 2018 ahead of new ring-fencing rules separating this part of the group from its investment arm. This part of the bank will hold 22,000 UK staff.