Bottom Line: Bank’s overhaul has further to go

 
Marion Dakers
HSBC’S patchwork of asset sales, writedowns and restructuring efforts over the past three years has made the bank a safer place to invest, boss Stuart Gulliver reckons, even if the cuts give the regular updates a confusing ruffled appearance, with impairments and flattering charges making comparisons each quarter less meaningful.

For example, a 32 per cent profit drop in HSBC’s core Asian market is somewhat easier to take when factoring in last year’s $1.8bn gain from Ping An.

Peering through those one-offs, analysts at Bernstein are hopeful that the long-awaited end to HSBC’s capital cushion rebuild next year will coincide with a return to higher interest rates worldwide, which could boost earnings by more than 40 per cent. More cautious scribblers at Investec believe the bank will take until 2017 to reupholster the business’ asset base.

The bank avoided such long-term forecasts yesterday, actually looking back to April’s “muted” trading in its outlook. With turmoil in emerging markets continuing, however, it seems there are more cuts to come.