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October 25, 2021

HSBC wealth and personal banking arm reports jump in Q3 profit

HSBC’s Wealth and Personal Banking arm has reported a pre-tax adjusted profit of $1.9bn in the third quarter of 2021.

The figure represents a nearly 32% jump compared to $1.44bn registered in the same period a year ago.

The increase was attributed to a $600m reduction in adjusted ECL indicating stable economic conditions and better than expected levels of credit performance.

However, the unit’s adjusted revenue in the quarter dropped by 3% to $5.42bn from $5.57bn on a year-on-year basis due to the impact of reduced interest rates globally.

A negative impact in life insurance manufacturing of $167m also affected the Wealth and Personal Banking arm’s earnings in the quarter.

Global private banking revenues totalled $467m, up from $424m in the prior year quarter.

Group results

HSBC’s profit before tax recorded a $2.3bn jump to $5.4bn as pandemic-related blows subsided.

The group’s profit after tax also more than doubled from $2.04bn in Q3 2020 to $4.2bn in Q3 2021.

Quarterly revenues grew by 1% to $12bn.

The lender also said that the revenue outlook is becoming more positive with stability in net interest income and fee growth across multiple businesses.

It also announced plans to initiate a share buyback of up to $2bn soon.

HSBC group CEO Noel Quinn said: “We had a good third-quarter performance, with strong growth in profits supported by additional credit provision releases. Our strategy remains on track, with good delivery in all areas. This was reflected in more consistent top-line growth, robust lending pipelines across our businesses, and rising trade and mortgage balances.

“While we retain a cautious outlook on the external risk environment, we believe that the lows of recent quarters are behind us. This confidence, together with our strong capital position, enables us to announce a share buyback of up to $2bn, which we expect to commence shortly.”

In August, HSBC launched portfolio-based advisory solution called Wealth Portfolio Plus (WPP).

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