It said the rate of profit growth slowed in the third
quarter and there could be “some bumps in the road” for emerging markets
growth, and said tougher European regulations on pay and a UK bank tax would
have a damaging impact.
HSBC, which named a new chairman and chief executive six
weeks ago after a damaging boardroom power struggle, has said it could leave
Britain if the environment becomes too hostile, and it said shareholders were
asking it to assess whether the costs of staying in London were too high.
“They are asking us to evaluate what the regulatory changes
are likely to cost and what impact it will have on our business model,” said
Douglas Flint, the finance director who takes over as chairman next month.
HSBC said in a trading update that loan impairments in the
third quarter fell to their lowest quarterly level since the onset of the
credit crisis in 2007.
The United States, where the ill-timed acquisition of a
subprime consumer lender caused it the most pain during the financial crisis,
accounted for the largest share of the improvement in delinquent loans.
Shares in the bank were down 1.81 percent at 682.5 by 1136
GMT, underperforming a 1.35 percent fall by the European bank index.
Analysts said results were adequate but its investment
banking may have fared slightly worse than expected.
Earlier on Friday UK rival Royal Bank of Scotland reported
an operating profit of £726 million for the third quarter, as a drop in bad
debts offset a fall in investment banking revenue.
HSBC said it was of “some concern” that the EU and UK were
going further than rivals elsewhere in terms of regulation.
The bank said a clampdown on remuneration “creates a huge
problem for a global company,” especially in countries such as China, Brazil
and India, where it is struggling to compete with local or US rivals for
talent.
“It would be unacceptable from the point of view of our
shareholders if we're unable to attract and retain the type of people required
to manage the risks in the bank and deliver profit,” said Stuart Gulliver, the
investment banking boss who takes over as chief executive next year.
A UK tax on bank balance sheets also “effectively places a
tax on their emerging market growth,” CEO Michael Geoghegan said.
RBS said the tax could cost it £250 million next year and £400
million in 2012, but HSBC said it was too early to estimate its impact.
HSBC said it was confident it could meet tougher new capital
rules and Geoghegan said the only reason it would raise capital would be for a
major acquisition, and nothing was planned.
Its core Tier 1 capital ratio rose to 10.5 percent at the
end of September, compared to 9.9 percent at the end of June.
Trading revenues for Global Banking and Markets (GBM), its
investment banking arm, were lower in the latest quarter than a year ago, the
bank said, noting seasonal factors and more subdued market sentiment. GBM had a
“solid” October, Flint said.
HSBC does not report full quarterly results. It made a
pretax profit of $11.1 billion for the first six months of the year. Its pretax
profit is expected to more than double to $20.2 billion this year, according to
the average of 22 analysts polled by Reuters Estimates.
