HSBC Profits Plummet 80% After Chinese Losses

The logo of HSBC in one of its branches in the German city of Dusseldorf. (dpa)
The logo of HSBC in one of its branches in the German city of Dusseldorf. (dpa)
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HSBC Profits Plummet 80% After Chinese Losses

The logo of HSBC in one of its branches in the German city of Dusseldorf. (dpa)
The logo of HSBC in one of its branches in the German city of Dusseldorf. (dpa)

HSBC’s quarterly profit plunged 80 percent as it took a $3 billion charge on the value of its stake in a Chinese bank and a further write-down on commercial real estate, underlining how a slowdown in the country’s economy continues to hit international lenders.

Profits for the final three months of 2023 fell to $1 billion from $5 billion in the same period a year earlier, HSBC said on Wednesday.

The UK-based lender earns most of its profits in Asia and holds a 19 percent stake in Bank of Communications.

“BoCom remains a strong partner in China, and we remain focused on maximizing the mutual value of our partnership. Our positive views on the medium and long-term structural growth opportunities in mainland China are unchanged,” it said.

While rising interest rates globally boosted HSBC’s full-year earnings to a record, the bank has faced headwinds over the past year in China, one of its key growth markets.

The ongoing real estate meltdown has not only hurt the world’s second-largest economy but has forced HSBC to set aside money to cover potential losses, including $200 million in the quarter.

At the same time, HSBC announced a $2 billion share buy-back and a fourth-quarter interim dividend of 31 cents a share. Chief executive officer Noel Quinn warned in the statement that the macro environment remains “challenging”, and the outlook remains uncertain amid geopolitical volatility in Europe and the Middle East.

The bank’s shares slid as much as 3.8%, as trading resumed in Hong Kong on Wednesday.

HSBC on Wednesday reported a 6% hike in costs in 2023, blaming spending on levies in the US and Britain. Europe's biggest bank by assets also forecasts a 5% rise in costs in 2024, after committing to invest despite stubbornly high inflation.



Egypt's Net Foreign Assets Slid in October

A general view shows Tahrir Square in Cairo, Egypt July 13, 2020. (Reuters)
A general view shows Tahrir Square in Cairo, Egypt July 13, 2020. (Reuters)
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Egypt's Net Foreign Assets Slid in October

A general view shows Tahrir Square in Cairo, Egypt July 13, 2020. (Reuters)
A general view shows Tahrir Square in Cairo, Egypt July 13, 2020. (Reuters)

Egypt's net foreign assets (NFAs) dropped by $1.12 billion in October after a rise in September, central bank data shows.

NFAs declined to the equivalent of $9.21 billion at the end of October from $10.33 billion at the end of September, according to Reuters calculations based on the official central bank currency rates. The decline followed a $591 million gain in September.

Egypt had been using NFAs, which include foreign assets at both the central bank and commercial banks, to help to prop up its currency since as long ago as September 2021.

NFAs turned negative in February 2022 and only returned to positive territory in May this year.

Foreign assets rose at the central bank in October but dipped at commercial banks while foreign liabilities climbed at both commercial banks and the central bank.