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(Sharecast News) - HSBC posted a 32% jump in pre-tax profit on Tuesday but third-quarter results from the bank were a touch short of expectations.
Pre-tax profit rose to $9.63bn, with revenue 5% higher at $18.62bn, mainly reflecting growth in banking net interest income. Both figures were just slightly below forecasts, however, as analysts were expecting pre-tax profit of $9.69bn and revenue of $18.93bn.
Net interest income - the difference between what banks charge for loans and what they pay out for savers' deposits - was up 6% on the same period a year earlier to $9.3bn.
Operating expenses were $8.8bn during the quarter, down 12% on the same period a year earlier.
The bank also announced plans to initiate a $1bn share buyback, to begin shortly after the release of the Q3 results and complete by the full-year results announcement.
Chief executive Georges Elhedery said: "Our performance shows that in a more complex world clients continue to turn to us to navigate uncertainty and seize new opportunities. It also reflects consistent execution of our strategic priorities with pace, precision and discipline.
"As we simplify HSBC, we are creating greater capacity to invest, grow and deliver strong returns for our shareholders."
At 1000 GMT, the shares were down 7% at 1,270p.
Russ Mould, investment director at AJ Bell, said: "Investors already know that higher interest rates are benefiting the banks so HSBC's big increase in third-quarter profits was not enough to win them over - particularly as revenue fell short of expectations.
"The results extend recent share price losses for the bank, which has been hit recently by Beijing's increased scrutiny on Chinese wealth going overseas. That is a problem for HSBC given a key part of its current strategy is doubling down on its Asian focus.
"HSBC is under pressure to bring costs down and while there is clear evidence of progress in the quarterly results, the market is likely to keep management's feet to the fire on this score.
"There may be disappointment at the performance of the wealth management division, which saw growth dry up in the quarter, while the company is warning of competitive pressure on deposits in both the UK and Hong Kong.
"HSBC is a supertanker of a business. While it has been relatively smooth sailing until recently for CEO Georges Elhedery as he seeks to helm a change in direction for the business, the latest update is the latest reminder that keeping HSBC on course will not be easy."
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