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HSBC Q3 Results Down, Expects To Beat Cost Target; Stock Up

(RTTNews) - Asia-focused lender HSBC Holdings Plc reported Tuesday weak profit and revenues in its third quarter, while adjusted deposits increased from the previous year. Further, the company accelerated its restructuring plan, expecting to beat its Group cost target of =$31 billion in 2022. HSBC shares were gaining around 5 percent in Hong Kong trading.

HSBC further said its 2020 to 2022 transformation programme and restructuring is on track despite headwinds, and expect to go further and faster on cost and RWA reduction programmes. The company expects to exceed original fiscal 2022 targets of $100 billion gross RWA reductions and $4.5 billion cost programme saves.

In the planned gross RWA reduction target, around $50 billion is expected to be achieved by the end of fiscal 2020. For the year to date period, HSBC has delivered $41 billion of RWA saves and $0.6 billion of cost programme saves.

Noting that dividends are important, the company said its decision on paying a conservative fiscal 2020 dividend will depend on the economic outlook in early 2021, and is subject to regulatory consultation.

Further, HSBC will update on its plans in France and the US along with fiscal 2020 results announcement in February 2021. US and Europe are executing at pace and remain committed to 2022 targets.

For the third quarter, profit before tax declined 36 percent to $3.07 billion from last year's $4.84 billion.

Profit attributable to ordinary shareholders fell 54 percent to $1.36 billion from $2.97 billion a year ago. Earnings per share were $0.07, down from $0.15 a year ago.

The company said the results were supported by significantly reduced ECL charge and continued good cost management

Adjusted profit before tax was $4.30 billion, compared to $5.42 billion a year ago.

Revenues for the quarter declined 10 percent to $12.07 billion from $13.35 billion a year ago. Adjusted revenue was down 10 percent to $12.1 billion. The results were positively impacted by $652 million movement in volatile items.

Net interest income fell 16 percent from last year to $6.50 billion, and non interest income dropped 2 percent to $5.57 billion.

Customer loans were $1.04 trillion, same as last year, and customer deposits were $1.57 trillion, same as last year. Adjusted deposits of $1.6 trillion went up 12 percent from last year.

In Hong Kong, HSBC shares were trading at HK$33.90, up 5.12 percent.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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