HSBC reports $8.5 billion pre-tax profit in third quarter

A HSBC bank logo is seen outside a branch of the bank in central London on February 21, 2017. HSBC profits plunged last year on huge writedowns and restructuring charges, the banking titan said on February 21, warning of uncertainty over Brexit and Donald Trump’s economic policies. (Photo by Niklas HALLE’N / AFP)

Hong Kong, China — Banking giant HSBC said Tuesday that pre-tax profit in the third quarter rose 10 percent year-on-year, citing revenue growth in two of its divisions, days after the lender announced an organizational overhaul.

The rise in pre-tax profit to $8.5 billion reflected a strong performance in its wealth management division as well as higher revenues in global banking and markets, HSBC said in an earnings release.

The London-headquartered bank last week announced a major shakeup under new chief executive Georges Elhedery, who assumed his role in September.

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“We delivered another good quarter, which shows that our strategy is working,” Elhedery said in a statement Tuesday.

HSBC on Tuesday also upped total distribution this year to $18.4 billion, and announced a fresh round of share buybacks of “up to $3 billion” — the latest in a series of moves to distribute capital to its investors.

The sale of its Argentina business, first revealed in April, is expected to be completed in the fourth quarter of this year, the bank added.

Last week, HSBC said it would simplify its structure and split into four distinct parts starting next year: Hong Kong, UK, “corporate and institutional banking” plus “international wealth and premier banking”.

Elhedery said the changes — which will also streamline its geographical set-up — will let it “better focus on increasing leadership and market share in those businesses which have clear competitive advantage and the greatest opportunities to grow”.

The CEO said in an internal memo that “there will inevitably be a reduction in duplicated roles, particularly at senior levels” due to the restructuring, according to Bloomberg News.

Chief risk officer Pam Kaur would take over as chief financial officer from January 1 — the first woman in the role in the bank’s 160-year history.

HSBC generates most of its revenue in Asia and has spent several years pivoting to the region, vowing to develop its wealth business and target fast-growing markets.

The bank, which straddles East and West as Europe’s biggest lender, has come under pressure as US-China tensions rachet up.

Major shareholder Ping An last year called on HSBC to spin off its Asia assets but the proposal was voted down.