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As profits dwindle, HSBC plans a radical overhaul

WHEN NOEL QUINN took over as interim chief executive of HSBC from John Flint, ousted by the board in August, analysts expected a change in style. In contrast to the outgoing boss, seen as a cerebral introvert, Mr Quinn comes across as forthcoming, verging on the blunt.On that front at least, HSBCs announcement of its latest results, the first on his watch, did not disappoint. Although the lenders Asian business held up well in a challenging environment, performance in other areas was not acceptable,'' Mr Quinn said on October 28th. Third-quarter net profits, down by 24% on the same period last year, to $3bn, undershot pundits forecasts by 14%. Revenues fell by 3.2%, to $13.4bn, missing expectations by 3%. Return on tangible equity (ROTE), the banks chief measure of profitability, reached 6.4%, compared with analysts forecast of 9.5%. Investors agreed with Mr Quinns verdict: the banks shares dropped by 4.3% on the news in London, their biggest daily fall in over two-and-a-half years. They have lost about 11% of their value in the last six months.
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