British bank HSBC reported 28% profit growth in Q3 2018 thanks to the renewed attempt to curb spending and boost its business in the Asian region. The largest bank in Europe has been gathering the fruits of its larger-scale restructuring in recent years, but rising costs are worrying as Chief Executive John Flint, who took office in February, is boosting investment.
The high spending over the past few years overweighed HSBC’s profit, and analysts said stock price growth would be curtailed until the bank could show that revenue grew faster than spending.
For the this quarter of 2018, the creditor announced earnings before taxes of 5.9 billion USD from 4.6 billion USD in the same period last year. The profit is above the average of 5.6 billion USD estimated by the finance analysts.
HSBC said that spending during the third quarter fell by 2.4% over the previous three months, which has fueled the trend in the past few quarters. The revenue for the quarter increased by 6.3% yoy to 13.8 billion USD.
“We are doing what we said we will do. We are growing from the areas we are strong in, and investing in business while we are holding on to spending”, said John Flint.
He outlined plans to spend 17 billion USD over the next three years for technology and expansion in China.
The lender hires more people to boost the growth of some of its divisions, including investment banking and private banking.
HSBC’s revenue before taxes for the Asian region, which accounts for 75% of the bank’s total profit in the third quarter, rose by 10.7% yoy to 4.5 billion USD.