Monday 29 October 2018 9:42 am

HSBC profits soar as bank keeps a ‘strong grip’ on costs and flourishes in Asia

Reporter at City A.M. covering banking, markets and insurance

Reporter at City A.M. covering banking, markets and insurance

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HSBC reported a 28 per cent profit rise as strong revenue in Asia and efforts to keep costs down paid off.

The bank reported a pre-tax profit rise of 28 per cent to $5.9bn (£4.6bn) in the third quarter of the year – with $4.6bn of that generated in Asia.

For the first nine of months of the years its pre-tax profit was $16.6bn, a 12 per cent increase on the same period in 2017.

HSBC said a five per cent rise in revenue year-to-date was driven primarily by a rise in Asia.

Expenses in the third quarter dropped 2.4 per cent compared with the second quarter.

Chief executive John Flint said: “These are encouraging results that demonstrate the revenue potential of HSBC.

“We are doing what we said we would – delivering growth from areas of strength, and investing in the business while keeping a strong grip on costs.”

Shares rose by four per cent in early trading as the bank beat forecasts with its strong set of results.

“HSBC may be the second biggest company on the UK stock market, but its profits are predominantly emanating from its historic home in the far east,” Laith Khalaf, analyst at Hargreaves Lansdon said.

“Three quarters of the bank's profits so far this year have come from its Asian operations, leaving the European business trailing in its wake,” he added.

Khalaf said its reliance on the fortunes of China could leave investors in for a bumpy ride if Trumps trade war stunts growth in the region.