HSBC- Earning with Risks Ahead

HSBC- Earning with Risks Ahead


HSBC on Monday announced its financial results for Q3, reported rise of 28 percent in Profit before tax from year ago pre-tax profit. Amount of $5.922 billion being the amount has barely touched the expected number for before tax profit of $5.99 billion forecasted by analysts at data firm Refinitiv. The expected rise rate was 29 percent.

Revenue generated during the last quarter while comparing with the same period a year ago, climbed up by 6.32 percent to $13.798 billion. Net interest margin as of September 30 was reported 1.67 percent, “That’s higher than the 1.63 percent seen a year ago” said HSBC. HSBC’s Opex for Q3 of 2017 was $8.546 billion which decreased by 6.79 percent to $7.966 billion for Q3 this year. With 16 percent rise from a year ago position, the adjusted pre-tax profit was $6.193 billion.

HSBC, despite being one of Europe’s leading Bank and it’s headquarter situated in London, generates large fraction of its revenue from Asian markets specially Hong Kong.  And after announcement of the Q3 results on Monday, price of HSBC’s shares listed in Hong Kong, rise by 5 percent. But threat to HSBC’s global growth has been increasing continuously because of the uncertain trade condition between America and China in the Asian Region. Since start of the year this situation has already affected the share value of HSBC both in Hong Kong as well as in London in shape of 20 percent fall.

HSBC has to face decline in Lending profitability in its key business in Hong Kong, due to slow paced economic activity in China. Challenging will be the current sell-off for HSBC’s trading business in global markets and could possibly results in lack of interest by investors.

Analyst has foresaw the announced results for Q3, but tip off the investors to give due consideration to bank’s business prospects guidance in following months.

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