Europe's largest bank reported profit before tax for third quarter 2018 of $5.9 billion, a 28 percent increase compared to the same period last year. The reported profit exceeded the average analysts' estimates of $5.6 billion, showing a percentage growth that is the strongest in four quarters.
The bank said the increase reflected its strong revenue growth and lower operating expenses which fell 2.4 percent. Its quarterly reported revenue also grows 6.3 percent from the year-ago period to $13.8 billion.
John Flint, HSBC group chief executive, said the bank - which is headquartered in London but with clients and investments mostly in Asia - reported a strong third quarter amid worries on the impacts of the escalating China-US trade war and the looming Brexit.
The executive added that the bank would pursue more investments in different markets, including Saudi Arabia despite the widespread backlash of the international community over the murder of journalist Jamal Khashoggi.
In the company's announcement, Flint said the third quarter results were encouraging demonstration of the revenue potential of HSBC, particularly that the company has been on strong cost-cutting measures.
Flint also said that while the ongoing China-US trade war is a real issue, the expected negative impacts have yet to manifest itself in HSBC's business activities.
In fact, HSBC's Asia operations reported a pretax profit of $4.5 billion which was a 10.7 percent increase. The sector accounted for 75 percent of the bank's overall profits in the September quarter. Hence, Flint said HSBC has plans to invest as much as $17 billion in three years in China.
Reuters noted that an important drive for HSBC's strong performance in Asia is its plans centered on developments and investments in China's Pearl River Delta region. Sources told Reuters that HSBC is set to become the first company to handle Chinese Depositary Receipts. HSBC would set up a system linking London and Shanghai stock exchanges. The initiative is expected to begin before 2018 ends, the sources revealed.
As for anxieties over the looming Brexit, Flint said HSBC has yet to see any indications of financial distress among its corporate clients as well as individual customers.
Elsewhere, HSBC is planning to put more workers in its businesses worldwide. The bank would particularly strengthen its talents in the investment banking and private banking sectors.
The bank has in fact been aggressively recruiting top executives in the recent months. It recently hired former JPMorgan banker Greg Guyett to co-head HSBC's global banking and investment banking. It also poached Peter Enns from Goldman Sachs to head its global financial operations group.
