By Marcus Leach

Shares in HSBC have fallen today (Wednesday) after the bank revealed a decrease in underlying profits.

"The outlook for the global economy is very challenging as problems in developed markets begin to affect growth rates around the world," the bank said in its interim results.


- Reported profit before tax ('PBT') for the third quarter of 2011 ('3Q11') was US$7.2bn, up US$3.6bn on 3Q10, and for the nine months ended 30 September 2011 ('the nine months') was US$18.6bn, up US$4.0bn on the same period in 2010. These results included US$4.1bn of favourable movements in credit spread on the fair value of our own debt recognised in the quarter and US$4.0bn for the nine months.

- Underlying PBT for 3Q11 was US$3.0bn, down US$1.6bn on 3Q10 due to decreased revenues in Global Banking and Markets, an adverse movement in non-qualifying hedges of US$0.7bn (US$1.3bn recorded in the quarter and US$0.6bn in 3Q10), and an increase in loan impairment charges, primarily in North America, partially offset by increased revenues in Commercial Banking globally.

- Underlying PBT for the nine months was US$14.4bn, down US$0.3bn on 2010, reflecting the decreased revenues in Global Banking and Markets and higher costs offset by significantly lower loan impairment charges, principally in North America, and growth in Commercial Banking revenues.

"Trading conditions showed some improvement during October, but they remain very difficult and continuing turbulence in global markets may result in further downside risk," the bank said.

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