HSBC shares surge on better than expected results

HSBC makes more than three-quarters of its profits in Asia

Shares in banking giant HSBC have risen sharply after it reported a better than expected 28% rise in quarterly profits and its boss played down the immediate impact of global trade tensions and Brexit.

Chief executive John Flint said he was yet to see a near-term impact from the escalating stand-off between the US and China – though the group, which makes three quarters of its profits in Asia, did make an unspecified provision against the cost of trade and tariff barriers.

Meanwhile he acknowledged a “difficult” period facing Saudi Arabia but said it was unlikely to see a significant impact on foreign trade and investment following the killing of journalist Jamal Khashoggi.

Shares in HSBC rose 6% after it said pre-tax profits climbed to $5.9bn in the July-September period compared to $4.6bn a year ago, helped by efforts to keep a lid on costs.

Mr Flint said: “These are encouraging results that demonstrate the revenue potential of HSBC.”

He told Reuters that he had not yet seen any signs of distress among corporate and individual customers’ financial health as the UK faces a crunch period in Brexit talks and growing concerns about a no-deal divorce.

“We are hoping that progress will be made in the coming weeks,” Mr Flint said.

The comments come after Royal Bank of Scotland said on Friday that it was putting aside a £100m provision due to the “more uncertain economic outlook” as Britain prepares to leave the EU.

While the remarks from HSBC’s boss appeared to brush off these concerns as well as wider global economic anxieties, the quarterly results did take account of Argentina’s inflation crisis as well as “challenging economic conditions in Turkey”.

There was also an unspecified provision to reflect “concerns over possible impacts of escalating tariffs and other trade restrictions” as US-China trade tensions escalate.

Mr Flint told Reuters: “It’s a real issue to be clear, but it’s not yet manifesting itself in business activities in a meaningful way.”

The chief executive also said Saudi Arabia was unlikely to see a significant impact on foreign trade and investment following international pressure over Mr Khashoggi’s death.

He said: “It has been a difficult few weeks for the kingdom, this has not been good for Saudi Arabia. – skynews.com