HSBC’s ‘pivot to Asia’ helps Q3 profit beat expectations
Lender’s profit for Q3 is US$5.44b, 1.4pc lower than last year, but marginally better than analyst forecasts, which had predicted US$5.41b
HSBC’s much-trumpeted “pivot to Asia” helped the bank beat analysts’ expectations during the third quarter.
After adjusting for one-off items, the lender’s profit for the third quarter of this year came in at US$5.44 billion, 1.4 per cent lower than the same period last year but marginally better than a poll of analyst forecasts compiled by the bank, which had predicted US$5.41 billion.
The decline was the result of an increase in operating expenses, but this was mostly mitigated by a rise in revenues from the bank’s main business lines, particularly in Hong Kong, China, and Asia more broadly.
“The latest results confirm a shift towards Asia,” said Joseph Dickerson, a banking analyst at Jefferies.
“In 2017 to date, for instance, revenue from the group’s Asian businesses contributed 50 per cent of the group total, up from 46 per cent in the same period in 2016, driven by loan growth and strength in fiduciary businesses such as cash management.”
And the trend is set to continue, added others.
“There is room for further growth in revenues from Hong Kong and China, especially as interest rates rise which will help margins in Hong Kong,” said Ivan Li, Hong Kong and China market strategist at DBS Vickers Securities, pointing out growth in Asia had helped compensate for a flatter performance in Europe.