HSBC profits up 30% as it faces probe over currency trading
HSBC PLC saw profit surge 30 per cent in the three months to the end of September, boosted by a strong performance in Britain and Hong Kong. But it also revealed it is one of several banks being investigated for possible manipulation of foreign exchange markets.
Reported pre-tax profit for the third quarter was $4.5 billion US compared with $3.4 billion for the same period a year ago, the bank said. Year-ago profit was depressed after the bank had to pay a $1.9-billion fine in a money-laundering case.
HSBC, Europe's biggest bank by market value, saw its nine-month profits rise 23 per cent as it benefited from cost-cutting and stable revenue.
The bank, which has a big presence in Asia, said Monday its net income grew to $13.5 billion in the nine months through September, from $10.9 billion in the same period last year.
Chief Executive Stuart Gulliver said the bank has made further progress toward simplifying and restructuring its operations, particularly with the recent sale of its Panama business. The bank has cut some 40,000 jobs out of a workforce of 300,000 since 2011.
"We continued to focus on managing our cost base, generating an additional $0.4 billion of sustainable savings over the quarter and bringing the total annualized sustainable savings achieved since the start of 2011 to $4.5 billion," the bank said in a statement said. "This is well in excess of the target we set out to achieve by the end of 2013."
Gulliver says the company sees reasons for optimism with some evidence of a broadening economic recovery — growth is stabilizing in China and picking up in the United States, albeit at a lower rate than historical standards. It also said it expects GDP growth in Latin America to remain slow, though the Mexican economy should strengthen in 2014.
The company also disclosed that the Financial Conduct Authority, the British regulator, is investigating its trading on the foreign exchange market. Several banks have already revealed they are the subject of an investigation into possible manipulation of currency trades. They include Citigroup, JPMorgan Chase & Co., Barclays PLC, UBS AG and Deutsche Bank AG.
"We are co-operating with the investigations which are at an early stage," HSBC said in its earnings statement.
With files from CBC News