The banking group’s reported revenue dropped by 11% in Q3 2020 at $11.92bn
HSBC headquarters, London. (Credit: HSBC Group)
HSBC said that its reported profit after tax for the third quarter of 2020 (Q3 2020) was down by 46% at $2.03bn, compared to $3.79bn it made in the same quarter of 2019 (Q3 2019).
The adjusted profit before tax in the reported quarter declined by 21% to $4.3bn compared to the corresponding quarter last year.
The banking group said that the decline in Q3 2020 profit was largely due to lower revenue. Its Q3 2020 results covered its share of an impairment of goodwill by its associate -The Saudi British Bank (SABB), of $500m.
Its diluted earnings per share in Q3 2020, that ended 30 September 2020, is $0.07 compared to $0.15 reported in the corresponding quarter in the previous year.
HSBC’s reported profit after tax during Q2 2020 was $617m, while the diluted earnings per share were $0.01.
The banking group’s reported revenue came down by 11% in Q3 2020 at $11.92bn compared to $13.35bn in Q3 2019. In Q2 2020, its reported revenue was $13.05bn.
According to HSBC, the lower revenue in Q3 2020 was driven by the effect of reductions in interest rates on its deposit franchises in all global businesses. This was offset slightly by favourable market effects in life insurance manufacturing, said the banking group.
Its reported expected credit losses and other credit impairment charges (ECL) came down by $100m to $800m in Q3 2020, compared to the same quarter of the prior year.
The reported operating expenses dropped by 1% to $8bn in Q3 2020 compared to $8.14bn in Q3 2019.
HSBC segment-wise results in Q3 2020
HSBC’s wealth and personal banking business reported an adjusted profit before tax of $1.42bn in Q3 2020 compared to $1.97bn in the same quarter of last year.
Its commercial banking unit’s Q3 2020 adjusted profit before tax was $1.17bn, compared to a Q3 2019 adjusted profit before tax of $1.63bn.
The global banking and markets unit reported an adjusted profit before tax of $1.23bn for the reported quarter, in comparison to $1.22bn in Q3 2019.
HSBC group chief executive Noel Quinn said: “These were promising results against a backdrop of the continuing impacts of COVID-19 on the global economy. I’m pleased with the significantly lower credit losses in the quarter, and we are moving at pace to adapt our business model to a protracted low interest rate environment.”
“We are accelerating the transformation of the Group, moving our focus from interest-rate sensitive business lines towards fee-generating businesses, and further reducing our operating costs. We also intend to increase our rate of investment in Asia, particularly in wealth, the Greater Bay Area, south Asia, trade finance and sustainable finance.”