Banking giant HSBC has reported pre-tax quarterly profits of $4.6bn (£3.5bn) for the three months to the end of September.The result marks a huge 448% increase from $843m posted in the same period a year ago.At that time, earnings were hit by a one-off loss of $1.7bn from the sale of its Brazilian unit. The latest result met market expectations and was helped by cost-cutting and a focus on Asia.”Our pivot to Asia is driving higher returns and lending growth, particularly in Hong Kong and the Pearl River Delta,” HSBC’s chief executive Stuart Gulliver said in a statement. The firm’s earnings were further boosted by higher premiums from its insurance and asset management businesses in Asia. HSBC’s shares were up more than 1% in afternoon trading in Hong Kong following the earnings update.
Since the 2008 financial crisis, HSBC has been cutting jobs and selling assets to make the group more profitable, while still making dividend payments to shareholders. ‘Innovate and accelerate’The bank’s continued bet on Asia, one of the world’s fastest growing economic regions, has been part of its strategy to expand the business and make up for losses elsewhere. Earlier this month, the bank’s new chairman Mark Tucker said it would be working “to develop and agree the key actions required to ensure we build on and enhance HSBC’s current momentum.”Those initiatives will be led by HSBC’s newly appointed group CEO, John Flint, who formally takes over from Stuart Gulliver next February.Mr Flint has said the bank had to “innovate and accelerate the pace of change required” to meet the expectations of shareholders, customers and employees.Laith Khalaf, senior analyst at Hargreaves Lansdown said HSBC’s investment banking division’s performance was “weak” but had “held up better than many of its competitors.”He stressed the growing importance of the bank’s Asia-generated business: “Regionally it’s Asia which is doing the heavy lifting for HSBC, and while the bank is headquartered in the UK and is the second largest company in the FTSE 100, its business primarily resides in the far east. “Indeed 70% of its profits so far this year come from Asia.”