Hong Kong bank reports 74% rise in third-quarter profit

SINGAPORE LONDON Reuters - HSBC Holdings reported a 74% rise in the third quarter profit, beating market expectations, as the Asia-focused bank released cash set aside for expected bad loans that have not materialised.

The bank posted a pretax profit of $5.4 billion for the quarter to September, versus $3.1 billion a year earlier and the average estimate of 14 analysts of $3.78 billion compiled by HSBC.

HSBC also announced a share buyback of up to $2 billion, as it continues to return excess capital to shareholders in place of investing cash in its businesses.

HSBC released $700 million in cash it had put aside in case pandemic-related bad loans spiked, as opposed to the same time a year ago when it took an $800 million charge in expectation of such soured debts.

In reality, the bank said that economic conditions have improved while loans have performed better than expected.

The results from the London-headquartered bank come as rivals such as Citigroup are riding a M&A boom, while fending off weakness in the lending business.