HSBC’s global profits fell 14% in the first nine months of the year, from 6.4 billion pounds to 5.5 billion pounds, after taking a major legal hit, but its UK mortgage lending grew.
The London-based bank had to set aside £827 million to pay damages related to Bernie Madoff’s Ponzi scheme after losing part of a court case last week.
But in its UK lending business, its third-quarter report looked more positive.
HSBC reported that its mortgage balances rose by £4.58 billion in the first nine months of the year to the end of September, and business loans rose by £4.28 billion.
In the UK, banks’ net interest income, which measures the difference between the interest rate they lend to savers and other savers, rose by £380m, or 6%.
This reflected growth in residential and business loan books and deposits, which helped cushion the impact of lower mortgage rates and profit margins, the report said.
Group chief executive Georges Elhedery said: “Building on our core strengths, we are becoming a simpler, more agile and focused bank.
“Despite legal requirements related to historical matters, our intent to execute our strategy is reflected in this quarter’s results.
“The positive progress we have made gives us confidence in our ability to upgrade our target and we now expect a 2025 RoTE (return on tangible assets) excluding significant projects to be around 15 or higher.
“We remain fully focused on helping our clients navigate the new economic reality, putting their changing needs at the heart of everything we do.”
