Dow Jones Newswires: HSBC profit misses expectations and bank warns of challenging outlook

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HSBC Holdings PLC said third-quarter net profit fell 24% from a year earlier because of “challenging market conditions.”

The U.K. banking giant 5, -2.51% HSBC, +0.15% HSBA, +0.00%  on Monday reported net profit of $2.97 billion. A Factset poll of analysts had tipped a net profit of $3.96 billion for the quarter.

Third-quarter revenue was down 3.2% on year at $13.36 billion, it said.

Adjusted profit before tax fell 12% on year to $5.35 billion, excluding foreign-exchange differences and significant items.

While its Asian business “held up well in a challenging environment,” performance in Europe was “not acceptable,” said Noel Quinn, HSBC’s Group Chief Executive.

Third-quarter net interest income declined 1.4% on year to $7.57 billion, the bank said, while operating profit was down 19% on year at $4.33 billion.

The bank said the revenue environment is more challenging than in the first half of this year and that part of its portfolio weren’t delivering acceptable returns.

HSBC said that it expects significant charges in the fourth quarter and “subsequent periods” including possible impairment of goodwill and additional restructuring charges.

“We will act to rebalance our capital away from low-return businesses and adjust the cost base in line with the actions we take,” HSBC said.