The underlying pre-tax profit was $5 billion, a 10% rise on the figure achieved a year ago. The bank remains optimistic that momentum will continue with economic recovery taking hold in several of its markets.
The spike in profits puts HSBC ahead of its peers. Royal Bank of Scotland (RBS) slipped into the red in the third quarter losing £634 million before tax (1 Nov), while Lloyds Banking (LLOY) lost £609 million during the period (29 Oct). Emerging market-focused bank Standard Chartered (STAN) remains profitable, although its growth this year will be single figures (29 Oct).
HSBC has joined its peers in being investigated as part of a global probe into currency trading manipulation. Barclays (BARC) and RBS last week suspended some of their forex traders. HSBC is under the microscope of six regulators, including those in the US, Switzerland and Japan.
HSBC’s growth was driven by its strong UK and Hong Kong businesses. Half of its pre-tax profits were generated in these markets and offset a weaker investment banking performance.
The bank’s core lending business grew $47.7 billion in the third quarter to some $1 trillion, while it continued to strengthen its balance street. HSBC's core tier 1 ratio – its risk-weighted assets compared to its reserves – is 13.3%, up from 12.3% at the start of the year.