China slowdown over-hyped according to HSBC’s CEO
Chinese stocks falling has impacted HSBC revenues and wealth management business in AsiaReuters

HSBC has reported pre-tax profits of $6.1bn (£3.9bn) for the third quarter, up 32% on the same period last year. The bank's stringent programme of cost cutting, which saw it announce thousands of job cuts in June this year, is starting to get some traction on the bottom line.

HSBC chief executive officer Stuart Gulliver said cost reductions were beginning to have an impact on the bank's cost base. He said in a statement: "There is more to achieve on costs and we expect the measures we have already taken to have a further impact in the fourth quarter."

The pre-tax earnings beat analysts' forecasts which were pitched at $5.2bn for the quarter. However, HSBC's revenue was down 4% to $14bn: the bank's retail operations and wealth management have been impacted by the hit taken on Chinese stocks and reverberations across Asian markets.

Gulliver said the bank had remained "resilient" in the face of such things. He said: "Despite slowing growth in the mainland Chinese economy and market volatility in Asia, there has been no visible impact on our Asian credit quality."

The flow of regulatory costs which has blighted the bank's performance of late, also seems to be slowing.

HSBC also sold its operations in Brazil in August as it divests itself of loss-making divisions and non-core operations around the world. It also disposed of its UK pensions business HSBC Life.

It remains to be seen whether the banks will decide to shift its HQ away from London's Canary Wharf to relocate somewhere like Hong Kong – a decision which may be delayed beyond the end of this year.

Regarding the decision to leave the UK, HSBC said: "Whilst there is a considerable amount of work still to do, a significant amount of work has been carried out, supported by a number of external advisers. In addition, as the review has progressed, further information has been requested by
the board.

"While the target for completion of the review was initially set as by the end of 2015, this is a self-imposed deadline that can be moved should the Board require further work to be performed."

Connor Campbell, market analyst at www.spreadex.com told IBTimes: "Despite a better than expected 32% jump in pre-tax profit, boosted by a drop in the bank sector spectre that is misconduct fines and settlements, an Asian-inspired 4% fall in revenue and the warning that its HQ decision could be pushed in 2016 helped drag HSBC to a one-month low this Monday."