HSBC's Third-Quarter Profit Fell 46% on Impairments, Rising Provisions
25 Oktober 2022 - 6:55AM
Dow Jones News
By Clarence Leong
HSBC Holdings PLC's third-quarter net profit slid 46% from a
year earlier as the bank booked impairment charges for the disposal
of its retail-banking operations in France and a rise in credit
provisions.
The Asia-focused lender posted $1.91 billion net profit for the
three months to Sept. 30, down from $3.54 billion in the
year-earlier period, it said Tuesday.
Net operating income dropped 3.2% to $11.62 billion, despite a
30% rise in net interest income to $8.58 billion as rising interest
rates globally boosted income from loans. The lender said the
decline was due to the impairment on the planned disposal of its
banking operations in France and "adverse foreign-currency
translation impacts."
HSBC set aside more provisions against bad loans, reporting
expected credit losses of $1.1 billion for the quarter, which
reflect "increased economic uncertainty, inflation, rising interest
rates and the ongoing developments in mainland China's commercial
real-estate sector," it said. That compares with a net release of
$659 million in the same period last year.
The bank upgraded its guidance for net interest income for 2022
to $32 billion from at least $31 billion previously. But for 2023,
it now expects net interest income of at least $36 billion, down
from its previous guidance of at least $37 billion, partly due to
sterling weakening against the greenback.
"We retained a tight grip on costs, despite inflationary
pressures, and remain on track to achieve our cost targets for 2022
and 2023," Chief Executive Noel Quinn said in a statement.
The bank is focused on "delivering our returns target of at
least 12% from 2023 onwards and, as a result, higher distributions
to our shareholders," he added.
The lender didn't declare a dividend for the quarter. It had
said earlier that it intends to return to paying quarterly
dividends in 2023.
Write to Clarence Leong at clarence.leong@wsj.com
(END) Dow Jones Newswires
October 25, 2022 00:40 ET (04:40 GMT)
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