HSBC profits surge 32% as bank resists relocation pressure

Summarised from 3 outlets · 4 reports · Updated 27 Oct, 13:20 · Archive

HSBC reported a 32% rise in third-quarter profits to $9.6bn, with its chief financial officer saying the bank faces no pressure to leave the UK despite expected tax increases.

HSBC reported pre-tax profits of $9.6bn (£7.2bn) for the three months to September, a 32% increase on the same quarter last year. The bank announced plans to return $2.7bn to shareholders through dividends and buybacks, with a separate $1bn share buyback scheme also announced.

The results were partly driven by higher net interest income – the difference between what banks make from loans and what they pay depositors – as UK interest rates have remained elevated. Earnings were also bolstered by lower expected credit losses and smaller provisions for legal costs than the same period a year ago.

The profit surge comes one day before Chancellor John Healey's Budget on Wednesday, where reports suggest he could raise the bank surcharge on profits from 3% to 8%, reversing a cut made by the previous Conservative government. A 5% increase in the surcharge is expected to raise around £2bn annually for the Treasury.

HSBC's chief financial officer, Pam Kaur, said the bank faced 'no pressure' to relocate its headquarters from London, despite months of warnings from lobbying groups that higher tax bills could drive banks' business abroad. Responding to speculation about relocation, Kaur said: 'We are very comfortable, we are domiciled in the UK and we remain in the UK. So that question is just not on the table.' She declined to speculate on the Budget announcement, saying there were 24 hours to go.

Kaur said HSBC was 'very encouraged' by the government's growth agenda and its support for UK innovation, infrastructure and trade deals. However, the bank trimmed its UK growth forecast for 2027 to 1.1%, down from 1.2% in August and 1.4% at the start of the year. The Guardian separately reported that higher mortgage rates driven by elevated interest rates have weighed on the housing market, with Zoopla finding that 35% of UK homes are in postcode areas where prices are falling, up from 12% a year ago.

How it is being reported

• HSBC quarterly profit surge sparks fresh calls for bank tax hike in BudgetPam Kaur, the banking group’s chief financial officer, said there was ‘no pressure’ on the bank despite facing the prospect of higher costs.Independent Business · 27 Oct, 13:04
• HSBC ‘very encouraged’ by Burnham agenda despite tax threatHSBC’s finance boss said the bank is “very encouraged” by Andy Burnham’s agenda, despite slashing its UK growth forecast ahead of a potential tax raid. Pam Kaur, HSBC’s chief financial officer, said: “The UK is our home market, our focus in the UK is supporting customers with their growth ambitions.” But when asked about a [...]City AM · 27 Oct, 10:56
• HSBC says ‘no pressure’ to move HQ out of UK despite prospect of higher bank taxesAs John Healey’s budget decision looms, lender reports 32% rise in profits Business live – latest updates A top executive at HSBC has tried to quash speculation that the bank could move its headquarters out of the UK over tax increases expected to be announced in Wednesday’s budget. HSBC’s chief financial officer, Pam Kaur, said there was “no pressure”, particularly from shareholders in its cornerstone Hong Kong market, to shift out of London despite lobbyists warning higher tax bills could drive big banks’ business abroad. Continue reading...Guardian World · 27 Oct, 10:21
• HSBC to hand billions to shareholders as profits surge 32% – business liveRolling coverage of the latest economic and financial news HSBC CFO Pam Kaur is speaking to the media now. On the issue of a bank tax (which John Healey could announce tomorrow), Kaur expresses support for what Andy Burnham’s government are doing, saying: “We only have 24 hours to go. We are very encouraged by the government’s growth agenda, particularly how we can lean-in to support not just specific sectors like UK innovation, infrastructure. and the UK trade deals, but also in terms of how we are the connector for the UK with the rest of the world, given the success the government has had…The Guardian · 27 Oct, 07:20

In this story: HSBC · Pam Kaur · John Healey · Jamie Dimon · Andy Burnham · UK · London · Hong Kong

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