HSBC’s Middle East and North Africa unit yesterday reported a 27 per cent increase in third-quarter pretax income as Europe’s biggest bank by market value continued to streamline its operations through cost cuts and focusing on its most profitable businesses.
The third-quarter profit for the region was in line with the bank’s 30 per cent increase in pretax income, which rose to US$4.53 billion from $3.48bn the same period last year, the London-based bank said on its website yesterday.
The bank’s home markets of the United Kingdom and Hong Kong accounted for more than half of its earnings, it said.
“We see reasons for optimism with some evidence of a broadening recovery,” said Stuart Gulliver, the chief executive at HSBC. “Indications are that economic growth in mainland China is stabilising, with positive implications for Hong Kong and the rest of Asia-Pacific. The US should continue to grow, albeit at a low rate by historical standards. The UK should see positive growth and outperform the euro zone.”
HSBC’s Middle East and North Africa unit accounted for 8.3 per cent of the group’s total net income in the third quarter. Profits from the region rose to $379 million compared with $276m in the same quarter the previous year, the bank said. Fees from investment banking and markets accounted for about 60 per cent of the region’s profit.
“The Middle East and North Africa benefited from releases of charges raised in previous periods,” HSBC said without elaborating. “This reflected an improvement in the financial position of certain customers.”
HSBC said that it is cooperating with the Financial Conduct Authority in the UK and other agencies investigating HSBC and other firms relating to trading on the foreign exchange market.
Foreign exchange fees brought in $660m in the third quarter, the mainstay of the lender’s global markets operations.
Regulators in London and Zurich are investigating the $5.3 trillion-a-day foreign exchange market after Bloomberg News reported in June that dealers in the industry said they had been front-running client orders and attempting to rig benchmark rates.
Since 2011, HSBC has shed 46,000 jobs and closed or divested 60 of its business as it reeled from the impact of Europe’s sovereign debt crisis.
Shares of the lender rose as much as 2.9 per cent to 707.3 pence in London yesterday, bringing the year’s gain to 9 per cent.