HSBC sees profits soar as workers prepare for Brexit fall-out

HSBC has reported a five-fold increase in third quarter pre-tax profit, as a sweeping overhaul aimed at a shift in focus towards Asia paid off.

The bank, employs more than 4,000 in Scotland out of a total global workforce of 233,000, reported pre-tax profit of $4.62bn, up from $843m in the same period last year as revenue rose 13 per cent to $13bn.

The large increase was partly due to large one-off costs incurred a year ago.

Stripping these out, adjusted profits actually fell 1 per cent to $5.44bn this time as costs grew, reflecting investments in business growth programmes as well as higher banker bonuses.

Shares were more than 1 per cent lower in midday trading in London on the back of the news.

The is nearing the end of a major restructuring, launched in 2015, that includes shedding thousands of workers and shrinking its global size so it can focus more on Asia’s emerging markets.

It is also bringing in new leadership, with John Flint, head of HSBC’s retail and wealth management arm, set to replace current chief executive Stuart Gulliver in February and Mark Tucker succeeding Glasgow-born Douglas Flint as chairman on 1 October, after spending years in senior positions in Asia.

Meanwhile, the bank’s Scottish finance director, Iain Mackay, said the bank still expects to transfer up to 1,000 employees from the UK to Paris in response to Brexit.

“It may be less than 1,000 employees that we will transfer, but it is up to 1,000 and that guidance remains very consistent,” the University of Aberdeen business studies and accounting graduate said as he explained that timings will be largely determined by the terms and conditions associated with Brexit.

HSBC incurred $8m costs associated with the UK’s exit from the EU in the third quarter and $101m in respect of work to ring-fence its Birmingham-based retail bank in the UK.