HSBC pre-tax profits tumble after disposal of Brazilian operation

Pre-tax profits at HSBC fell 86 per cent in the third quarter as it stomached a hefty hit from the disposal of its Brazilian business.

The banking giant said reported pre-tax profits hit $843 million (€761.5m) in the three months to the end of September, down from $6.097 billion (€5.507bn) over the period last year.

However, adjusted pre-tax profits beat expectations, rising 7 per cent to $5.591 billion in the third quarter, up from $5.240 billion in 2015.

Group chief executive Stuart Gulliver said the performance underscored the strength of the bank's global network.

“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.

“Reported profits included the impact of the disposal of our operations in Brazil, changes in the fair value of our own debt, and the costs of implementing our cost-reduction programmes.”

New chairman

Reported revenues also came under pressure in the third quarter, dropping to $9.512 billion from $15.085 billion in 2015.

The bank – which takes a large slice of its business from Asia – remained tight-lipped about who will replace group chairman Douglas Flint after announcing in March that the hunt had begun to find a successor ahead of his departure in 2017.

At the top of the new chairman’s in-tray will be the search for a chief executive to replace Mr Gulliver.

HSBC confirmed last week that it was hiring former London Stock Exchange boss Dame Clara Furse as the chairman of HSBC UK, its ring-fenced bank based in Birmingham.

– PA