HSBC Holdings the largest bank in Europe by volume announced that its pretax profit for the third quarter had gone up by 30% as it cuts costs and maintained more focus on its markets that were most lucrative.
Profit before taxes was up from last year’s $3.478 billion to $4.531 billion, said the lender based in London. However, profits missed the average of analysts that was $5.54 billion.
Costs in proportion to revenue, excluding losses and gains in the value of the debt of the bank dropped to 61% from 64%, which was approaching the bank’s goal set by Stuart Gulliver the CEO.
The bank’s CEO said in May he would cut another $3 billion in expenses after beating a previous target. He has shuttered or sold more than 60 businesses as well as cut over 46,000 jobs since he started in 2011.
The bank struggled to increase its revenue that was crimped due to the European sovereign debt crisis, the ending of the its consumer finance operation in the U.S. and growth that was slower than expected this year in China.
In Hong Kong, pretax profit was up 16% to over $2.07 billion, which was helped by China’s stabilizing economy, said the bank on Monday.
The lender also took a charge of $428 million to replay the customers who were wrongly sold insurance for loans, wealth advice and hedging products along with a revaluation charge of $575 million on the debt of the bank.
Those two items contributed to the bank missing the estimates by analysts. Otherwise, the earnings at the financial institute were positive, said on analysts in London.
Lenders in Britain have taken charges over the mis-selling of insurance for payment protection along with other financial scandals over the past years.
The bank set aside during the quarter $147 million for consumers who had been sold the insurance they did not want, understand or need, $132 million for companies that had been sold hedging products that were tied to interest rates and $149 million for the investigation of sales practices in it wealth business in the UK.