HSBC’s profit jumps 50% to US$7.2b in 3Q11

In Hong Kong, profit-before-tax was up by US$100m, boosted by strong growth in the commercial banking and global banking market.

Reported profit before tax for the third quarter of 2011 was US$7.2bn, up US$3.6bn on 3Q10, and for the nine months ended 30 September 2011 was US$18.6bn, up US$4.0bn on the same period in 2010. These results included US$4.1bn of favourable movements in credit spread on the fair value of our own debt recognised in the quarter and US$4.0bn for the nine months.

Reported revenues for the quarter were US$4.6bn higher than 3Q10 and, for the nine months, were US$4.7bn higher than the comparable period in 2010, including the effect of movements in credit spread on the fair value of our own debt of US$4.1bn and US$4.0bn recorded in the quarter and the nine months, respectively.

In Hong Kong, PBT for the quarter decreased by US$0.1bn compared with 3Q10 as revenues generated from the higher customer lending balances were more than offset by the effect of market valuation changes on insurance revenues. In addition, loan impairment charges increased from a low base and costs rose, reflecting inflationary pressures and investment in staff supporting business growth. Compared with 2Q11, costs fell as we maintained our focus on improving operational efficiency.

PBT for the nine months increased by US$0.1bn, primarily due to strong balance sheet growth, particularly in Commercial Banking and Global Banking and Markets, which benefited from targeted asset and deposit growth and a rise in economic activity, and a strong increase in fee income, notably from the sale of Wealth Management products.

Loan growth in 3Q11 moderated as continued growth in Retail Banking and Wealth Management and Global Banking and Markets was offset by a reduction in Commercial Banking as certain trade finance loans matured. Inflationary pressures and investment in staff caused operating expenses to increase in the nine months.