(Alliance News) - HSBC Holdings PLC on Tuesday reported a decline in profit and revenue in the third quarter, but the bank continues to remain positive for the full-year.

Shares in the Asia-focused lender were down 0.1% in Hong Kong on Tuesday at HKD42.05. They closed at 473.98 pence in London on Monday.

In the three months to September 30, HSBC reported pretax profit of USD3.15 billion, down 42% from USD5.40 billion a year before.

"We maintained our strong momentum in the third quarter and delivered a good set of results. Our strategy produced good organic growth in all three global businesses, and net interest income increased on the back of rising interest rates. We retained a tight grip on costs, despite inflationary pressures, and remain on track to achieve our cost targets for 2022 and 2023," Chief Executive Noel Quinn said.

Net interest income improved to USD8.58 billion from USD6.61 billion, but net fee income fell to USD2.78 billion from USD3.32 billion. Net insurance premium income slipped to USD2.66 billion from USD2.72 billion. As a result, revenue decreased by 3.2% to USD11.62 billion from USD12.01 billion.

HSBC explained that its third quarter results included a USD2.4 billion impairment, following the reclassification of its retail banking operations in France to held-for-sale, as well as a net charge for expected credit losses and other credit impairment charges, compared with a net release in third quarter of 2021.

However, net interest margin improved to 1.57% from 1.19% year-on-year

Its cost efficiency ratio was 68.7% in the third quarter, compared to 66.5% a year earlier.

HSBC's CET1 ratio ended September 30 CET1 at 13.4%, down from 15.9% a year ago.

Turning to the bank's business units, HSBC's Wealth & Personal Banking adjusted pretax profit rose to USD2.41 billion from USD1.90 billion, while Commercial Banking profit increased to USD2.06 billion from USD1.97 billion and Global Banking & Markets adjusted profit rose to USD1.53 billion from USD1.42 billion.

Regionally, HSBC's Asia operation continue to be its profit driver.

Statutory pretax profit in Asia rose to USD3.51 billion from USD3.30 billion a year earlier, whilst in Europe profit swung to a loss of USD1.57 billion from USD1.14 billion profit. Profit in the Middle East & North Africa improved to USD493 million from USD378 million. Profit in North America rose to USD460 million from USD358 million. In Latin America, profit increase to USD248 million from USD222 million.

In the first nine months of 2021, HSBC's group pretax profit fell to USD12.32 billion from USD16.24 billion, while revenue slipped to USD36.85 billion from USD37.56 billion.

Looking ahead, HSBC said: "Our outlook on revenue remains positive and we have upgraded our net interest income guidance for 2022 to USD32 billion, based on the current market consensus for global central bank rates.

"In 2023, we now expect net interest income of at least USD36 billion, with the reduction from the at least USD37 billion guidance provided at our interim results reflecting the impact of sterling depreciation against the US dollar and a higher cost of funding in our trading book. We continue to monitor the expected path of interest rates. This is expected to be supported by low-single-digit percentage lending growth."

By Sophie Rose; sophierose@alliancenews.com

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