HSBC posts higher Q3 profit despite $4.3 billion US loan write-off

10 November 2008

HSBC Holdings Plc, Europe's biggest bank, today reported a higher than expected third quarter profit, despite $4.3 billion loan write-offs in the United States, but a lower pre-tax profit for the nine-month period ended 30 September 2008 compared to the corresponding period in the previous year.

''The unprecedented turbulence seen in financial markets continues to present enormous challenges for the financial sector as a whole, as an increasing range of asset classes experience illiquidity and extreme price volatility,'' HSBC said in a release.

The underlying change in sentiment reflected growing concerns over the effect of recession in mature economies on the growth prospects in many emerging markets, it said.

HSBC was a major recipient of deposit inflows as participants in financial markets sought to reduce the risks associated with their investment portfolios and retail customers moved to larger and stronger institutions.

The bank said it was considering carefully how it deploys its balance sheet and capital strength and through focusing on ensuring that lending margins appropriately reflect increasing risk.

"Although we have not been immune from the effects of the severe de-leveraging of the financial system, we have been able to reinforce and grow some of our most important franchises as other banks have weakened, and this will make us stronger when market stability returns,'' the release added.