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| HSBC shares fall on weak underlying profits | HSBC shares fall on weak underlying profits |
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| HSBC shares have fallen in early trading after the bank revealed shrinking underlying profits and warned of a "very challenging" outlook. | HSBC shares have fallen in early trading after the bank revealed shrinking underlying profits and warned of a "very challenging" outlook. |
| Its shares were 6% lower in Wednesday afternoon trading in London. | Its shares were 6% lower in Wednesday afternoon trading in London. |
| Headline profit before tax was actually up 66% to $5.2bn (£3.2bn) in the third quarter of the year, mainly thanks to a revaluation of its own debts, the value of which has fallen in fretful markets. | Headline profit before tax was actually up 66% to $5.2bn (£3.2bn) in the third quarter of the year, mainly thanks to a revaluation of its own debts, the value of which has fallen in fretful markets. |
| But underlying profits fell 36% due to weak business, and bad debts in the US. | But underlying profits fell 36% due to weak business, and bad debts in the US. |
| "The outlook for the global economy is very challenging as problems in developed markets begin to affect growth rates around the world," the bank said in its interim results. | "The outlook for the global economy is very challenging as problems in developed markets begin to affect growth rates around the world," the bank said in its interim results. |
| HSBC repeated a warning that it may relocate its headquarters away from the UK, blaming new, stricter rules on capital - the amount of money they have to provision against potential future losses. | HSBC repeated a warning that it may relocate its headquarters away from the UK, blaming new, stricter rules on capital - the amount of money they have to provision against potential future losses. |
| The UK government plans to introduce a ringfence for banks, requiring them to put their UK operations in a separate subsidiary, and is requiring them to significantly raise their capital levels, particularly for the UK business. | The UK government plans to introduce a ringfence for banks, requiring them to put their UK operations in a separate subsidiary, and is requiring them to significantly raise their capital levels, particularly for the UK business. |
| US bad loans | US bad loans |
| HSBC revealed that it had $13.7bn in direct exposure to troubled southern European economies - including $5.3bn to Italy - a comparatively modest figure compared with its $122bn in loss-absorbing core tier 1 capital. | HSBC revealed that it had $13.7bn in direct exposure to troubled southern European economies - including $5.3bn to Italy - a comparatively modest figure compared with its $122bn in loss-absorbing core tier 1 capital. |
| Business levels at its investment banking unit continued to suffer, with profits down by more than half compared with the previous quarter, to $1bn. | Business levels at its investment banking unit continued to suffer, with profits down by more than half compared with the previous quarter, to $1bn. |
| "Trading conditions showed some improvement during October, but they remain very difficult and continuing turbulence in global markets may result in further downside risk," the banks said. | "Trading conditions showed some improvement during October, but they remain very difficult and continuing turbulence in global markets may result in further downside risk," the banks said. |
| Meanwhile, impairment charges and other provisioning for credit risks increased by $1bn in the three month period, the banks said, with the bulk coming from its North American business. | Meanwhile, impairment charges and other provisioning for credit risks increased by $1bn in the three month period, the banks said, with the bulk coming from its North American business. |
| Cost-cutting | Cost-cutting |
| "The shares have fallen foul of high expectations," said Richard Hunter, head of equities at stockbrokers Hargreaves Lansdown. | "The shares have fallen foul of high expectations," said Richard Hunter, head of equities at stockbrokers Hargreaves Lansdown. |
| "HSBC remains largely exposed to economies in Asia which continue to enjoy burgeoning growth when compared to their peers in developed economies. | "HSBC remains largely exposed to economies in Asia which continue to enjoy burgeoning growth when compared to their peers in developed economies. |
| "The strength of the bank's capital position and global growth prospects continue to underpin prospects." | "The strength of the bank's capital position and global growth prospects continue to underpin prospects." |
| The lender is currently going through a major cost-cutting programme, which has already seen 5,000 job cuts, and is concentrating on its core Asia businesses. | The lender is currently going through a major cost-cutting programme, which has already seen 5,000 job cuts, and is concentrating on its core Asia businesses. |