HSBC swings to Q3 loss on Brazil disposal

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On November 7, the UK banking giant said it swung to a third-quarter loss of $ 204 million from a year-earlier profit of $ 5.23 billion, due in part to a S$ 1.74 billion loss from the disposal of its operations in Brazil. HSBC completed the sale of its Brazil business to Banco Bradesco in July.

On a pre-tax basis, the bank’s profit plunged 86% to $ 843 million from $ 6.1 billion. Its adjusted revenue rose 2% to $ 12.79 billion, due in part to higher contributions from its fixed income businesses, as the bank gained market share in Europe, HSBC said.

The weak results come against the backdrop of concerns about its Asia strategy and questions about the effects of the UK vote to leave the European Union. On Thursday, a UK court ruled that Prime Minister Theresa May can’t start the exit process without approval from Parliament.

HSBC shares have risen more than 11% since August, when it unveiled a plan to spend up to $ 2.5 billion in the second half to repurchase shares. Shares were up 1% at HK$ 58.05 in the Hong Kong morning session before the earnings announcement.

The bank said it has completed 59% of its share-repurchase plan, which is expected to conclude in late 2016 or early 2017.

HSBC also said its common equity Tier 1 capital ratio increased to 13.9% in the third quarter from 12.1% in the second, following “a change in the regulatory treatment” of its stake in Chinese lender Bank of Communications.

Write to Joanne Chiu at joanne.chiu@wsj.com and Julie Steinberg at julie.steinberg@wsj.com

This article was published by The Wall Street Journal

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