HSBC swings to third-quarter loss

The UK banking giant has been weighed by its Brazilian sale, and a significant forex hit.

On a pretax basis, HSBC’s profit plunged 86 per cent to $US843m from $US6.1bn.

HSBC Holdings has swung to a third-quarter loss, weighed by the impact from the sale of its Brazilian business and an unfavorable foreign-exchange environment.

On Monday, the UK banking giant said it swung to a third-quarter loss of $US204 million ($265.6m) from a year-earlier profit of $US5.23 billion ($6.81bn), due in part to a $US1.74bn ($2.27bn) loss from the disposal of its operations in Brazil. HSBC completed the sale of its Brazil business to Banco Bradesco SA in July.

On a pretax basis, the bank’s profit plunged 86 per cent to $US843m from $US6.1bn. Its adjusted revenue rose 2 per cent to $US12.79bn, due in part to higher contributions from its fixed income businesses, as the bank gained market share in Europe, HSBC said.

The weak results come against the backdrop of concerns about its Asia strategy and questions about the effects of the UK vote to leave the European Union. On Thursday, a UK court ruled that Prime Minister Theresa May can’t start the exit process without approval from parliament.

HSBC shares have risen more than 11 per cent since August, when it unveiled a plan to spend up to $US2.5bn in the second half to repurchase shares.

The bank said it has completed 59 per cent of its share-repurchase plan, which is expected to conclude in late 2016 or early 2017.

HSBC also said its common equity Tier 1 capital ratio increased to 13.9 per cent in the third quarter from 12.1 per cent in the second, following “a change in the regulatory treatment” of its stake in Chinese lender Bank of Communications Co.

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