The profits exist but the high price of litigation and compliance is still affecting earnings at HSBC.
The largest bank on the London’s stock exchange was upbeat about earnings, stating pre-tax profit of $4.6bn in the third quarter, a rise of 2 per cent. But this was off from analysts’ expectations of $5.46bn and the list of 2014 operating expenses, including a large proportion for litigation payments finally totalled $1,968 million in the first 9 months and $1,530 million in the third quarter. An additional $400m is also to be reserved for costs of the investigation into its dealings in the foreign exchange market by U.K. Financial Conduct Authority.
Shares fell 2 per cent to 627p.
Reported PBT (Profit before Tax) of US$4,609m up US$79m on prior year and included fines, settlements and UK customer redress of US$1.8bn
Global Business PBT1 of US$6,641m up US$873m versus 3Q13
Reported PBT of US$16,949m, down US$1,652m on prior year reflecting the effect of significant items
Global Business PBT1 up US$1,230m versus 9M13
Strong capital base with a common equity tier 1 ratio (end point basis) of 11.4%
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