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HSBC Holdings posted Q3 net loss

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Staff Writer | November 7, 2016
HSBC Holdings reported a net loss in its third quarter, compared to profit last year, hurt by significant losses mainly related to disposal of its Brazilian operations. Net interest income also declined from last year.
HSBC Holdings
HSBC Holdings   Net loss was $204 million
For the quarter, net loss attributable to shareholders of the parent was $204 million, compared to last year's profit of $5.23 billion.

On a pre-tax basis, the company recorded profit of $843 million, down 86 percent from last year's $6.10 billion.

The latest quarterly results included $1.74 billion loss from the disposal of operations in Brazil, $1.37 billion fair value losses of own debt, and $1.01 billion costs-to-achieve.

After adjusting one-time items, profit before tax was $5.59 billion, compared to $5.24 billion a year ago.

Stuart Gulliver, HSBC Group Chief Executive, said, "Our third-quarter performance reflected the strength of our network and the deepening impact of our strategic actions. Reported profits were down, but adjusted profits were higher than last year's third quarter in all four global businesses and four out of five regions."

Asian profit grew 10 percent to $3.80 billion, and Europe profit grew 5 percent. Middle East and North Africa recorded 16 percent profit growth and Latin American profit surged 88 percent. In North America alone, adjusted pre-tax profit declined 31 percent.

Revenue of $12.79 billion grew 2 percent from $12.53 billion last year.

Net interest income declined to $7.19 billion from prior year's $8.03 billion. Net operating income before loan impairment charges and other credit risk provisions declined to $9.51 billion from $15.09 billion a year ago. In the quarter, net fee income and net trading income also dropped.

HSBC reported 4 percent fall in costs reflecting the effect of transformational cost saving programmes. Annualised savings were $2.8 billion. The bank said it remains on track to achieve cost savings target of $4.5 billion to $5.0 billion.

The bank generated a further $57 billion of risk-weighted assets (RWA) savings in the third quarter notably from the disposal of Brazil. It is now more than 80 percent of the way to achieving RWA reduction target.

For fiscal 2017, the company said its on track to meet Group RWA reduction target of $290 billion.