HSBC Holdings reported a 76% YoY jump in its Q3 pre-tax profits to $5.4bn vs. expectations of a 23% jump. Post-tax profits were up $2.2bn YoY to $4.2bn. Profits were helped primarily by a release of expected credit losses (ECL) and other credit impairment charges of $700mn vs. a charge of $800mn during the same period last year. Meanwhile, revenue for Q3 was 1% higher at $12bn. While the lender did not announce any dividends, it plans to buyback shares up to $2bn shortly with the Group CFO indicating that its capital position was “very strong”. Regarding its exposure to China real estate HSBC said that it had no direct credit exposure to Chinese developers in the “red” category and limited exposure to those in the “orange” category (referring to the three-red lines categories). CFO Ewen Stevenson added that they have been conservative for a while in lending to the property sector. HSBC’s CEO Noel Quinn said, “While we retain a cautious outlook on the external risk environment, we believe that the lows of recent quarters are behind us”. Its CET1 ratio stood at 15.9%, up 30bp QoQ.
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