© Stocksak. FILE PHOTO – A logo of HSBC can be seen at its headquarters in Hong Kong’s financial Central district, China on August 4, 2020. REUTERS/Tyrone Siu/File Photograph
SINGAPORE, (Stocksak), HSBC reported Tuesday a drop in profit of 42% for the third quarter, mainly due to rising credit losses provisions and other impairments. However, net interest income soared as banks enjoy rising interest rates.
For the three months ending Sept. 30, the pretax profit at the London-based bank was $3.15 billion. This was a decrease of $5.4 billion from a year ago but still well above the $2.45 trillion average of analyst estimates that the bank compiled.
Following reclassification in France of the bank’s retail operations, the results revealed an impairment of $2.4Billion.
HSBC, which has the largest share of its sales and profit in Asia came under pressure in April from Ping An Insurance Group. The Chinese firm is its largest shareholder.
Tuesday’s report from the bank indicated that there was a problem in its plan for wooing long-suffering shareholders by increasing payouts. It stated that it needs to increase its core capital of 13.4% above 14% before it can resume buybacks or dividends.
It stated that it would do this by the second half of next year by increasing revenue, and managing costs.