HSBC beat analysts’ third- quarter profit estimates, as costs and litigation charges declined at a faster pace than revenue, with Europe’s largest lender saying it may need more time to determine whether to move its headquarters from London.
Pretax profit rose to US$6.1 billion from $4.6bn a year earlier, London-based HSBC said in a statement on Monday. That beat the $5.2bn average estimate of 14 analysts compiled by the bank. Operating costs fell 19 per cent to $9bn, offsetting a 4.4 per cent drop in revenue to $15.1bn, hurt by turmoil across Asian markets.
Chief executive Stuart Gulliver unveiled a three-year plan in June to pare back a sprawling global network, shut money-losing businesses and eliminate as many as 25,000 jobs after compliance costs surged. The third-quarter result benefited from a $1.4bn decline from a year earlier in fines, settlements and redress for UK customers. HSBC said the board requested “further information” as it seeks to take a decision on whether to move headquarters abroad, with a further update planned for early 2016.
“HSBC’s reassuring dullness shines through,” said Ian Gordon, an analyst at Investec with a buy rating on the stock. “Revenue weakness was concentrated in retail banking and wealth management and the investment bank, but strong cost and impairment performances delivered a resilient result which, in a challenging quarter for U.K. banks, offers modest encouragement.”
At the retail banking and wealth management division, adjusted pretax profit fell to $1.5bn from $2.1bn a year earlier. In global banking and markets, which houses the investment bank, profit was little changed at $2bn, while revenue fell 20 per cent after “challenging market conditions” slashed rates and credit trading volumes. Global private banking reported a drop of 96 per cent to $8 million.
“The revenue weakness was mainly due to weaker markets,” said Raul Sinha, an analyst at JPMorgan Chase & Co. “Overall, this was an in-line quarter, with little to get excited about” as the bank continues to build capital “and tries to bring down costs despite regulatory and inflation pressures.”
The bank, which has been generating most of its earnings in Asia, is assessing whether to move its headquarters away from London, partly because of increasing taxes and some of the strictest bank regulations in the world. Among the criteria listed as part of its assessment are also economic growth and long-term stability.
Pretax profit in Asia rose 2 per cent to $3.5bn in the quarter from a year earlier and impairments on bad loans fell 16 per cent to $638m. HSBC has said half of $180bn to $230bn of risk-weighted assets it plans to redeploy under a revised strategy will be invested in Asia, as it adds some 4,000 jobs in China’s Pearl River Delta region over the next three to four years,
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The specs
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Price: Dh554,000
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THE SPECS
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Transmission: Seven-speed auto
Power: 165hp
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Price: Dh99,900 to Dh134,000
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The specs: 2018 Chevrolet Trailblazer
Price, base / as tested Dh99,000 / Dh132,000
Engine 3.6L V6
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Engine: 2-litre direct injection turbo
Transmission: 7-speed automatic
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UK record temperature
38.7C (101.7F) set in Cambridge in 2019
EMIRATES'S REVISED A350 DEPLOYMENT SCHEDULE
Edinburgh: November 4 (unchanged)
Bahrain: November 15 (from September 15); second daily service from January 1
Kuwait: November 15 (from September 16)
Mumbai: January 1 (from October 27)
Ahmedabad: January 1 (from October 27)
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Source: Emirates
Sarfira
Director: Sudha Kongara Prasad
Starring: Akshay Kumar, Radhika Madan, Paresh Rawal
Rating: 2/5
Motori Profile
Date started: March 2020
Co-founder/CEO: Ahmed Eissa
Based: UAE, Abu Dhabi
Sector: Insurance Sector
Size: 50 full-time employees (Inside and Outside UAE)
Stage: Seed stage and seeking Series A round of financing
Investors: Safe City Group
The bio:
Favourite holiday destination: I really enjoyed Sri Lanka and Vietnam but my dream destination is the Maldives.
Favourite food: My mum’s Chinese cooking.
Favourite film: Robocop, followed by The Terminator.
Hobbies: Off-roading, scuba diving, playing squash and going to the gym.
Company profile
Company name: Fasset
Started: 2019
Founders: Mohammad Raafi Hossain, Daniel Ahmed
Based: Dubai
Sector: FinTech
Initial investment: $2.45 million
Current number of staff: 86
Investment stage: Pre-series B
Investors: Investcorp, Liberty City Ventures, Fatima Gobi Ventures, Primal Capital, Wealthwell Ventures, FHS Capital, VN2 Capital, local family offices
The First Monday in May
Director: Andrew Rossi
Starring: Anna Wintour, Karl Lagerfeld, John Paul Gaultier, Rihanna
Three stars
Keane on …
Liverpool’s Uefa Champions League bid: “They’re great. With the attacking force they have, for me, they’re certainly one of the favourites. You look at the teams left in it - they’re capable of scoring against anybody at any given time. Defensively they’ve been good, so I don’t see any reason why they couldn’t go on and win it.”
Mohamed Salah’s debut campaign at Anfield: “Unbelievable. He’s been phenomenal. You can name the front three, but for him on a personal level, he’s been unreal. He’s been great to watch and hopefully he can continue now until the end of the season - which I’m sure he will, because he’s been in fine form. He’s been incredible this season.”
Zlatan Ibrahimovic’s instant impact at former club LA Galaxy: “Brilliant. It’s been a great start for him and for the club. They were crying out for another big name there. They were lacking that, for the prestige of LA Galaxy. And now they have one of the finest stars. I hope they can go win something this year.”
The biog
Born: near Sialkot, Pakistan, 1981
Profession: Driver
Family: wife, son (11), daughter (8)
Favourite drink: chai karak
Favourite place in Dubai: The neighbourhood of Khawaneej. “When I see the old houses over there, near the date palms, I can be reminded of my old times. If I don’t go down I cannot recall my old times.”
PROFILE OF SWVL
Started: April 2017
Founders: Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh
Based: Cairo, Egypt
Sector: transport
Size: 450+ employees
Investment: approximately $80 million
Investors include: Dubai’s Beco Capital, US’s Endeavor Catalyst, China’s MSA, Egypt’s Sawari Ventures, Sweden’s Vostok New Ventures, Property Finder CEO Michael Lahyani
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Company Profile
Company: Astra Tech
Started: March 2022
Based: Dubai
Founder: Abdallah Abu Sheikh
Industry: technology investment and development
Funding size: $500m
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Director: Kushan Nandy
Starring: Nawazuddin Siddiqui, Bidita Bag, Jatin Goswami
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