HSBC Q3 pretax profit slides 42% on France sale, credit losses

HSBC bank

HSBC reported on Tuesday a drop of 42% in third-quarter profit, on the back of rising credit loss provisions and other impairments, but its net interest income surged as banks benefit from rising interest rates.

The London-headquartered bank posted a pretax profit of $3.15 billion for the three months ended September 30. That was down from $5.4 billion a year ago, but well above the $2.45 billion average of analyst estimates compiled by the bank.

The results included an impairment of $2.4 billion, following reclassification of the bank's retail operations in France to be held for sale.

HSBC, which makes the bulk of its sales and profit in Asia, came under pressure from Ping An Insurance Group, the Chinese firm that is its biggest shareholder, in April to explore options including spinning off and listing its mainstay Asia business to increase shareholder returns.

The bank on Tuesday reported a snag in its plan to woo long-suffering shareholders with increased payouts, saying it needs to boost its core capital level of 13.4% back above 14% before it can resume buybacks and dividends.

It said it would do this by the first half of next year by increasing revenue and managing costs.