HSBC reported better-than-expected third quarter results today, pushing shares in the bank to the highest level in just over a year.
The banking group today said underlying profits were significantly ahead of a year ago, with losses on US consumer loans showing their first fall in three years.
But the bank cautioned it was still too soon to call a turn in US debtors defaulting on loans, which hit around $3bn in the third quarter, although there were positive signs.
Overall charges from bad debts and other credit risk provisions declined in the quarter and were at their lowest quarterly level since the second quarter of 2008.
Chief Executive Michael Geoghegan said: ‘At a time when economic conditions have remained challenging and public trust in banks has been seriously compromised, we are attracting new customers in our target segments.
‘We have maintained our strong deposit base and we continue to lend to and support customers through difficult times,’ he added.
HSBC said its investment banking arm had maintained its record performance in the quarter, following bumper results by rivals including Barclays.
Today’s trading update lacked detailed figures on the quarterly results but the bank said costs had declined from the same period last year due to savings from restructuring in the US and tight cost control elsewhere. Total assets were said to be broadly unchanged from 30 June 2009.
The results are good news for the banking giant, now looking to be putting the troubles of last year’s financial crisis behind. HSBC managed to avoid turning to the Government for state aid, unlike rival Lloyds Banking Group.
‘I believe the biggest jolt has now passed through the global economy,’ said HSBC Chief Executive Michael Geoghegan.
‘The world will likely see a two-speed recovery,’ he said, adding that emerging markets are likely to drive the recovery.
