HSBC net profits jump in Q3 on accounting gain
10 November 2011
HSBC's net profit soared in the third quarter on an accounting gain but its underlying earnings dipped as chief executive Stuart Gulliver warned of "significant headwinds" for the banking sector.
HSBC, Europe's biggest bank, saw its profit after tax surge 66 per cent to $5.22 billion in the three months to September, reflecting a revaluation of its debt, as against the year-earlier $3.15 billion.
Underlying pre-tax profits were down 35 per cent to $3.0 billion as revenues fell and bad loans of the bank rose in the US.
"The (banking) sector faces significant headwinds," HSBC chief executive Stuart Gulliver said in a statement.
"The continuing macroeconomic, regulatory and political uncertainty, particularly in Europe, adversely affected our industry's performance in the quarter ... Against this backdrop, HSBC remains resilient, with a strong balance sheet and robust liquidity," he said.
The lender said, its exposure to the debt of weak eurozone states - Greece, Ireland, Italy, Portugal and Spain stood at $5.5 billion at the end of third quarter, down from $8.2 billion on 30 June.