HSBC: Profits well ahead of 2009 but revenue slows

[November 05, 2010]  LONDON (AP) -- British bank HSBC said Friday that its pretax profit for the first nine months of the year is running "well ahead" of last year although revenue growth slowed in the third quarter.

In a trading update, HSBC Holdings PLC said trading activity in its Global Banking and Markets division had eased because of seasonal factors and more subdued market sentiment. However, provisions for bad loans in the third quarter were at the lowest level since early in 2007, the bank said.

HSBC did not release detailed earnings figures.

Shares were up half a percent at 698.7 pence in early trading on the London Stock Exchange.

Outgoing Chief Executive Michael Geoghegan was cautious about the outlook.

"Our latest data from emerging markets points to a slowdown in the rate of recovery and the likelihood of some bumps in the road ahead," Geoghegan said.

"However, we believe the long-term fundamentals for emerging economies are as compelling as ever. It remains our conviction that growth there will outpace the developed world for the foreseeable future."

HSBC said its Asian operations were performing strongly, and improvement continued in Latin America and the Middle East.

In North America, HSBC said it cut gross lending by $7.5 billion to $61.3 billion.

HSBC suffered in the United States through its acquisition of Household International, operator of the Beneficial and Household Finance brands, which made HSBC the biggest subprime mortgage lender in the U.S. HSBC wrote off billions in bad loans following the credit crisis in 2008.

Geoghegan will step down at the end of the year, to be succeeded by Stuart Gulliver, who currently heads HSBC's investment banking operations.

Chief Financial Officer Douglas Flint will become chairman, succeeding Stephen Green who is leaving to take a government post.

[Associated Press]

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