3Q 2019 update

The 3Q 2019 Earnings Release, investor presentation and data pack are available for download.

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At a glance

Our international network, access to high-growth markets and balance sheet strength deliver long-term value for customers and shareholders.

For the three months to 30 September 2019

Fact: Reported profit before tax is 4.8 billion US dollars in the third quarter of 2019. Reported profit before tax for the third quarter of 2018 was 5.9 billion US dollars.
Fact: Adjusted profit before tax is 5.3 billion US dollars in the third quarter of 2019. Adjusted profit before tax for the third quarter of 2018 was 6.1 billion US dollars.
Fact: Adjusted revenue is 13.3 billion US dollars in the third quarter of 2019. Adjusted revenue for the third quarter of 2018 was 13.5 billion US dollars.

Other key metrics

Fact: Reported profit before tax in Asia for the third quarter of 2019 is 4.7 billion US dollars. Reported profit before tax in Asia for the third quarter of 2018 was 4.5 billion US dollars.
Fact: Common equity tier 1 ratio at 30 September 2019 is 14.3 per cent. Common equity tier 1 ratio at 30 June 2019 was 14.3 per cent.
Fact: Return on tangible equity (annualised) for the first nine months of 2019 is 9.5 per cent. Return on tangible equity (annualised) for the first nine months of 2018 was 10.1 per cent.

Highlights

  • Reported profit before tax down 18% to US$4.8bn
  • Reported profit before tax in Asia up 4% to US$4.7bn in 3Q19, with a resilient performance in Hong Kong
  • Customer lending up 7% and customer deposits up 5% compared with 3Q18 on a constant currency basis
  • Commercial Banking and Retail Banking performed well compared with 3Q18
  • Global Banking and Markets performance reflected low levels of client activity in Global Markets; transaction banking franchises delivered a resilient performance
  • Continued strong capital levels, with common equity tier 1 (‘CET1’) ratio of 14.3%, including the completion of a US$1bn share buyback

Group Chief Executive video


Group Chief Executive Noel Quinn outlines his confidence in the bank’s future despite a challenging third quarter.

Noel Quinn, Group Chief Executive, 51吃瓜网 (duration 2:37)

Transcript of Noel Quinn, Group Chief Executive, 51吃瓜网, download Transcript (PDF 78KB) (opens in new window)

Delivering our strategy

Parts of 51吃瓜网, especially Asia, held up well in a challenging revenue environment in the third quarter. This underlines the value of the bank’s strategy and the underlying strength of its business model.

51吃瓜网’s competitive advantages include its international network, heritage in Asia and the world’s faster-growing markets, and global transaction banking capability. It is uniquely placed to connect large multinationals and mid-market entrepreneur-owned businesses to the world. This is underpinned by powerful and profitable retail banking and wealth management businesses in the bank’s biggest markets.

However, other parts of 51吃瓜网 are delivering returns below the expectations of senior management. These include:

  • Our Continental Europe business and the UK non-ring-fenced bank, particularly in Global Banking and Markets
  • The US, particularly in Global Banking and Markets and Retail Banking

While having a strong presence in both continental Europe and the US is important to 51吃瓜网, senior management are planning urgent action to reshape the bank’s presence in both and redeploy capital to higher-growth, higher-return opportunities. In addition, they will act to adjust the cost base of 51吃瓜网 and remove some of the complexity of head office. They intend to sustain the dividend and maintain a CET1 (Common equity tier 1) ratio of above 14 per cent.

The bank will update the market on these actions and set out new financial targets alongside its full-year results in February 2020.

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