⁍ HSBC posted a less-than-expected 35% drop in quarterly profit and flagged an easing in its provisions for bad loans.

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⁍ The change in approach marks one of the biggest long-term shifts in strategy to date from Europe’s biggest bank.

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⁍ With interest rates worldwide now rock-bottom and even turning negative, the bank is struggling to charge more for loans.

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– Europe’s biggest bank, HSBC, posted a 35% drop in quarterly profit today, as interest rates continue to fall and it struggles to charge more for loans than it pays out to depositors. But that wasn’t the bank’s only bad news: It also announced an accelerated plan to shrink in size and slash costs further, Reuters reports. The bank, which has already announced 35,000 job cuts worldwide, says it will communicate a revised dividend policy in February and provide an update on its 2020 full-year results in February. The announcement comes as the bank posted a less-than-expected 35% drop in quarterly profit and flagged an easing in its provisions for bad loans, citing an expected improvement in the economic outlook for its main markets. The change in approach marks one of the biggest long-term shifts in strategy to date from Europe’s biggest bank, which has long touted its ability to generate interest income from its more than $1.5 trillion in customer deposits. But with interest rates worldwide now rock-bottom and even turning negative, the bank is struggling to charge more for loans to borrowers than it pays out to depositors and it warned that net interest income would remain under pressure. Reported pretax profit for HSBC came in at $3.1 billion for the quarter ended Sept. 30, higher than the $2.07 billion average of analysts’ estimates compiled by the bank. Its Hong Kong-listed shares rose over 5%. Asia-focused HSBC said it expected losses from bad loans to be at the lower end of the $8 billion to $ 13 billion range it set out earlier this year.