HSBC shares drop after third quarter profit release
Despite improved earnings from interest-bearing business, the London-listed stock opened down around 5%. A worsening credit environment dragged on the stock, taking it down close to an area of key support.
HSBC earnings
The first of London's big banks has reported this morning, and it's been a bit of a disappointment to the markets because the numbers fell year-on-year (YoY). In fact, the third quarter (Q3) was better than had been expected.
Let's take a look at the figures as they came through today. This is HSBC on its third quarter numbers: pretax profit of $3.15 billion, down 42% from $5.4 billion this last year, but well above the $2.5 bn analyst estimates compiled by the bank.
Now, the drop is because of the rising credit loss provision and other impairments, but its net interest income surged as banks benefit from rising interest rates. Now, the result included an impairment of $2.4 billion following the reclassification of the bank's retail operations in France to be held for sale.
Stock heavily down
So the net effect of that was we saw the stock down heavily on the session today. And in fact, it's the biggest decline we've seen in this stock since the 26th of April this year and we are very close to closing in on this line of support down here at four 42.4 - 451 is where we are at the moment.
It certainly seems like much of the downside has now been seen by the bank. It was down three and a half percent in the Hong Kong markets, is currently down 4.8% here in London. That line of support at 442 marks a point at which it would then dip down into levels not seen since December last year.
So the markets looking very weak for HSBC despite the fact it's made a lot of income coming through from this rise in interest rates. Clearly the rising credit loss provisions are a concern and this is something that's going to be underscoring banks' performance in the next quarter as well as consumers finding it harder and harder to keep above the waterline in terms of household expenditure.
So HSBC on the way down today, marking the first of the big British banks to report earnings this week.
This information has been prepared by IG, a trading name of IG Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.
CFDs are a leveraged products. CFD trading may not be suitable for everyone and can result in losses that exceed your initial deposit, so please ensure that you fully understand the risks involved.
Act on stock opportunities today
Go long or short on thousands of international stocks with CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Try a risk-free trade
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
- Forex
- Shares
- Indices
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.