HSBC third-quarter profit rises to $5 billion, confirms forex probe

Mon Nov 4, 2013 9:20am EST
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By Steve Slater

LONDON (Reuters) - HSBC reported a 10 percent rise in third quarter profits on Monday, helped by tighter cost control and fewer losses from bad loans, and confirmed it was being investigated as part of a global probe into currency market trading manipulation.

Europe's largest bank said underlying pretax profit was $5.1 billion for the three months to September 30 - up 30 percent on a statutory basis - with strong Hong Kong and British markets together accounting for more than half of earnings and offsetting a fall in Latin American profits.

Chief Executive Stuart Gulliver said he saw evidence of a broadening recovery in which the U.S. should continue to grow, albeit slowly, and the UK would outperform the eurozone.

"There are signs for optimism around. We've always been confident China would have a soft landing ... which is supportive for the rest of Asia-Pacific," he told a conference call with reporters.

HSBC (HSBA.L: Quote) said it was cooperating with Britain's Financial Conduct Authority, which is leading an investigation into the $5.3-trillion-a-day foreign exchange market that has spread to include regulators in the United States, Asia and Switzerland. Traders from some of the world's top banks, including Barclays (BARC.L: Quote), Citigroup (C.N: Quote) and JP Morgan (JPM.N: Quote) have been suspended or put on leave.

HSBC, which has vowed to instill a more responsible corporate culture after it was fined a record $1.9 billion last year for lax anti-money laundering compliance, said it had not suspended or fired any staff, after being contacted in October.

"We haven't suspended anyone. It's at a very early stage and the names we've been given so far don't work for us anymore," Gulliver said.

HSBC warned of more regulatory uncertainty and set aside more money for potential settlements or compensation.   Continued...

People sit in an outdoor coffee shop in front of an HSBC bank branch in Valletta May 8, 2013. REUTERS/Darrin Zammit Lupi