HSBC, Europe's largest lender, said profit before tax in the third quarter plunged by about 42 per cent due to rising credit losses and impairments, even as its net interest income soared on rising borrowing costs globally.
Pre-tax income for the three months to the end of September fell to about $3.15 billion, from $5.4bn in the same period a year earlier while net interest income jumped 30 per cent to $8.6bn, the lender said on Tuesday.
The bank recorded a $2.4bn impairment after the reclassification of its retail banking operations in France ahead of the sale of that business, as well as a net charge for expected credit losses and other credit impairment charges, compared with a net release in the same period in 2021.
Reported revenue for the July-September period fell 3 per cent to $11.6bn, primarily reflecting an impairment on the planned disposal of its retail banking operations in France, as well as an adverse foreign currency translation impact of $1bn, it said.
However, net interest income increased in all the lender's businesses globally due to interest rate rises, with adjusted revenue rising 28 per cent to $14.3bn.
“We maintained our strong momentum in the third quarter … our strategy produced good organic growth in all three global businesses, and net interest income increased on the back of rising interest rates,” said group chief executive Noel Quinn.
“We retained a tight grip on costs, despite inflationary pressures, and remain on track to achieve our cost targets for 2022 and 2023. We are focused on executing our plans and delivering our returns target of at least 12 per cent from 2023 onwards and, as a result, higher distributions to our shareholders.”
Reported operating expenses were unchanged from the third quarter of 2021, while adjusted operating expenses rose 5 per cent due to a higher performance-related pay accrual and increased investment spending, mainly in technology.
Customer lending balances fell $61bn in the quarter on a reported basis. On an adjusted basis, lending balances fell $18bn, reflecting a $23bn reclassification of loans relating to the planned disposal of assets held for sale in France, partly mitigated by growth in mortgage balances of $2bn in the UK and $1bn in Hong Kong.
The bank said its outlook on revenue remained “positive”. It upgraded its net interest income guidance for 2022 to $32bn, based on the current market consensus for global central bank rates.
Central banks globally have been raising interest rates to tame surging inflation. The US Federal Reserve is expected to raise rates by a fourth 75 basis point move next month.
For 2023, HSBC expects net interest income of at least $36bn, a reduction from the guidance of at least $37bn provided in its interim results, which reflects the impact of the pound's depreciation against the US dollar and a higher cost of funding.
“We continue to monitor the expected path of interest rates. This is expected to be supported by low single-digit percentage lending growth,” the bank said.
It said macroeconomic headwinds, including higher inflation and a weaker outlook, continued to weigh on the global economy and the credit indicators in its wholesale and retail businesses remained “relatively benign” compared with historical levels.
Sholto Byrnes on Myanmar politics
How to vote
Canadians living in the UAE can register to vote online and be added to the International Register of Electors.
They'll then be sent a special ballot voting kit by mail either to their address, the Consulate General of Canada to the UAE in Dubai or The Embassy of Canada in Abu Dhabi
Registered voters mark the ballot with their choice and must send it back by 6pm Eastern time on October 21 (2am next Friday)
Who's who in Yemen conflict
Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government
Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council
Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south
Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory
Tax authority targets shisha levy evasion
The Federal Tax Authority will track shisha imports with electronic markers to protect customers and ensure levies have been paid.
Khalid Ali Al Bustani, director of the tax authority, on Sunday said the move is to "prevent tax evasion and support the authority’s tax collection efforts".
The scheme’s first phase, which came into effect on 1st January, 2019, covers all types of imported and domestically produced and distributed cigarettes. As of May 1, importing any type of cigarettes without the digital marks will be prohibited.
He said the latest phase will see imported and locally produced shisha tobacco tracked by the final quarter of this year.
"The FTA also maintains ongoing communication with concerned companies, to help them adapt their systems to meet our requirements and coordinate between all parties involved," he said.
As with cigarettes, shisha was hit with a 100 per cent tax in October 2017, though manufacturers and cafes absorbed some of the costs to prevent prices doubling.
Tamkeen's offering
- Option 1: 70% in year 1, 50% in year 2, 30% in year 3
- Option 2: 50% across three years
- Option 3: 30% across five years
Company%C2%A0profile
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Babumoshai Bandookbaaz
Director: Kushan Nandy
Starring: Nawazuddin Siddiqui, Bidita Bag, Jatin Goswami
Three stars
More from Neighbourhood Watch
What can victims do?
Always use only regulated platforms
Stop all transactions and communication on suspicion
Save all evidence (screenshots, chat logs, transaction IDs)
Report to local authorities
Warn others to prevent further harm
Courtesy: Crystal Intelligence
The specs: 2018 Mercedes-AMG C63 S Cabriolet
Price, base: Dh429,090
Engine 4.0-litre twin-turbo V8
Transmission Seven-speed automatic
Power 510hp @ 5,500rpm
Torque 700Nm @ 1,750rpm
Fuel economy, combined 9.2L / 100km
GAC GS8 Specs
Engine: 2.0-litre 4cyl turbo
Power: 248hp at 5,200rpm
Torque: 400Nm at 1,750-4,000rpm
Transmission: 8-speed auto
Fuel consumption: 9.1L/100km
On sale: Now
Price: From Dh149,900
Wicked: For Good
Director: Jon M Chu
Starring: Ariana Grande, Cynthia Erivo, Jonathan Bailey, Jeff Goldblum, Michelle Yeoh, Ethan Slater
Rating: 4/5
How to apply for a drone permit
- Individuals must register on UAE Drone app or website using their UAE Pass
- Add all their personal details, including name, nationality, passport number, Emiratis ID, email and phone number
- Upload the training certificate from a centre accredited by the GCAA
- Submit their request
What are the regulations?
- Fly it within visual line of sight
- Never over populated areas
- Ensure maximum flying height of 400 feet (122 metres) above ground level is not crossed
- Users must avoid flying over restricted areas listed on the UAE Drone app
- Only fly the drone during the day, and never at night
- Should have a live feed of the drone flight
- Drones must weigh 5 kg or less
Founders: Abdulmajeed Alsukhan, Turki Bin Zarah and Abdulmohsen Albabtain.
Based: Riyadh
Offices: UAE, Vietnam and Germany
Founded: September, 2020
Number of employees: 70
Sector: FinTech, online payment solutions
Funding to date: $116m in two funding rounds
Investors: Checkout.com, Impact46, Vision Ventures, Wealth Well, Seedra, Khwarizmi, Hala Ventures, Nama Ventures and family offices
COMPANY%20PROFILE
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Race card
5.30pm: Maiden (TB) Dh82,500 (Turf) 1,400m
6.05pm: Handicap (TB) Dh87,500 (T) 1,400m
6.40pm: Handicap (TB) Dh105,000 (Dirt) 1,400m
7.15pm: Handicap (TB) Dh105,000 (T) 1,200m
7.50pm: Longines Stakes – Conditions (TB) Dh120,00 (D) 1,900m
8.25pm: Zabeel Trophy – Rated Conditions (TB) Dh120,000 (T) 1,600m
9pm: Handicap (TB) Dh105,000 (T) 2,410m
9.35pm: Handicap (TB) Dh92,500 (T) 2,000m
RESULTS
5pm: Maiden (PA) Dh80,000 1,600m
Winner: Omania, Saif Al Balushi (jockey), Ibrahim Al Hadhrami (trainer)
5.30pm: Conditions (PA) Dh85,000 1,600m
Winner: Brehaan, Richard Mullen, Ana Mendez
6pm: Handicap (TB) Dh100,000 1,600m
Winner: Craving, Connor Beasley, Simon Crisford
6.30pm: The President’s Cup Prep (PA) Dh100,000 2,200m
Winner: Rmmas, Tadhg O’Shea, Jean de Roualle
7pm: Wathba Stallions Cup (PA) Dh70,000 1,200m
Winner: Dahess D’Arabie, Connor Beasley, Helal Al Alawi
7.30pm: Handicap (PA) Dh80,000 1,400m
Winner: Fertile De Croate, Sam Hitchcott, Ibrahim Aseel
Tell Me Who I Am
Director: Ed Perkins
Stars: Alex and Marcus Lewis
Four stars
