HSBC pre-tax profit up 2pc in third quarter

A foreign exchange probe and US$1.69 billion in provisions clouded HSBC Holdings' results even as it returned to profit gains in the third quarter of the year.

The bank marked out US$378 million for a foreign exchange probe launched by Britain's Financial Conduct Authority, bank executives said during a conference call yesterday, the latest in a series of penalties.

The bank also prepared to pay out US$701 million in the third quarter to compensate customers under British consumer redress programmes, a continuing cost for the bank.

In mid-September, HSBC agreed to pay US$550 million to resolve claims that it misled US government housing corporations Fannie Mae and Freddie Mac about mortgage securities it sold them before the 2007 collapse of the US housing market.

Together, the provisions for the quarter totalled US$1.69 billion, a 115 per cent spike year on year, with the management acknowledging regulatory fines and consumer grievances would likely further hamper performance.

"There will continue to be redress and fines that come through," chief executive Stuart Gulliver said during the call.