⁍ HSBC’s third-quarter revenue fell to $11.9 billion, down 11% from a year earlier.
⁍ Its 35% slide in pretax profit to $3.1 billion beat a consensus estimate of $2.07 billion.
⁍ HSBC now expects losses from bad loans to be at the lower end of the $8-$13 billion range it set out earlier this year.
– Europe’s biggest bank, HSBC, posted a 35% drop in quarterly profit yesterday, and it sounds like it’s ready to start charging some of its customers for basic banking services. “We will have to look at charging for basic banking services in some markets, because a large number of our customers in this environment will be losing us money,” CFO Ewen Stevenson tells Reuters. Customers in Britain, for example, expect to be free to use their current accounts, he notes. “It will need to be done carefully to not damage the trust of the brand or get customers to switch, especially in countries where competitors offer the service for no charge,” says an analyst. The changes come as interest rates around the world have fallen to record lows, making it harder for banks to charge more for loans than they pay out to depositors. The bank’s third-quarter revenue was $11.9 billion, down 11% from a year earlier. Its 35% drop in pretax profit to $3.1 billion beat a consensus estimate of $2.07 billion as HSBC flagged an easing in bad loan provisions. HSBC said on Tuesday it plans to reduce annual costs to below $31 billion by 2022, a more ambitious target than it set out in February and well below the operating expenses of $42.3 billion it reported in 2019. It will also accelerate the transformation of its US business, where it has long struggled to compete with much bigger players, and will provide an update at its 2020 results in February. Analysts and investors fear the lender could cut payouts in the long run.
Source: https://www.reuters.com/article/us-hsbc-hldg-results/hsbc-to-revamp-business-model-as-lower-interest-rates-hit-profit-idUSKBN27C0EB