HSBC warns of 'challenging' outlook as profit falls

HSBC warns of 'challenging' outlook as profit falls

HSBC warns of 'challenging' outlook as profit falls

HSBC Holdings Plc HSBA.L reported an 18% drop in its third-quarter pre-tax profit, lagging forecasts, as the Sino-U.S. trade war and Brexit uncertainties weighed on business sentiment in its core markets of Asia and Britain.

Net profit fell by almost a quarter to $3bn (£2.3bn) and revenue slipped 3.2pc to $13.4bn, missing City forecasts.

Banks and corporates have been suffering from the ongoing trade conflict between the United States and China.

The profit was lower than the US$5.3 billion average of analysts' estimates compiled by the bank.

Shares fell 3.4% in early trade in London.

The boss, who took over in August after his predecessor was ousted by the board, said previous plans "are no longer sufficient" to improve these areas as revenue growth is expected to soften.

"Parts of our business, especially Asia, held up well in a challenging environment in the third quarter", said Noel Quinn, HSBC's interim chief executive. He highlighted poor performance in Europe, the USA, and the investment and commercial bank in the UK.

"We are therefore accelerating plans to remodel them, and move capital into higher growth and return opportunities", Mr Quinn said.

But the performance in Europe and the USA "was not acceptable", he said.

"These actions, or any continuing deterioration in the revenue environment, could result in significant charges in 4Q19 and subsequent periods, including the possible impairment of goodwill and additional restructuring charges". Revenue may also suffer if global market conditions continue to be weak.

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