HSBC tipped for surge in pre-tax earnings
While analysts are eyeing US$5.4b for bank's third quarter, they also point to likelihood of raised provisions and a drop in return
Banking giant HSBC is set to report a surge in third-quarter pre-tax profit next week on the back of its fast-growing Asia-Pacific business and increased trade flows.
However, the results may be tempered by the need to set aside more provisions for legal costs and a drop in the return on its fixed-income investments.
The average estimate by five analysts in a Bloomberg survey of pre-tax profit for the quarter is US$5.4 billion. That translates into a leap of 54.2 per cent from a year earlier.
Excluding one-off gains on the disposal of assets and fair-value changes in the bank's own debt, underlying pre-tax profit is expected to increase by 8 per cent. Business in Hong Kong, which contributed 29.9 per cent to the group's pre-tax profit in the first half, and the rest of Asia, which accounted for 35.9 per cent, continued to be the leading contributors to the group, analysts said.
They cited the underlying economy growing at a rate outpacing that of other regions.
Increased global trade flows also brought extra revenue to the commercial banking arm, regarded as the core business of the group.
