This Day On The Street
Continue to site right-arrow
This account is pending registration confirmation. Please click on the link within the confirmation email previously sent you to complete registration.
Need a new registration confirmation email? Click here
Stocks Under $10 with 50-100% upside potential - 14 days FREE!

HSBC Cost Cutting Woos Investors: Financial Winners

Stocks in this article: HBC

NEW YORK ( TheStreet) -- HSBC Holdings (HBC) was the bank stock winner on Monday, with the company's American depositary receipts rising over 2% to close at $56.51.

HSBC early Monday announced a 40% increase in third-quarter profit before tax to $4.53 billion. After-tax profit attributable to shareholders was $3.2 billion, or 16 cents a share, increasing from $2.498 billion, or 13 cents a share, a year earlier.

Operating expenses were down 4% from a year earlier, to $9.572 billion in the third quarter; but HSBC said expenses excluding extraordinary items were up, "reflecting higher investment expenditure, wage inflation and litigation and regulatory-related costs."

HSBC CEO Charles Gulliver said the firm saw "an additional US$0.4bn of sustainable savings over the quarter," bringing total annualized "sustainable savings achieved since the start of 2011 to US$4.5bn."

Like so many other global banks, HSBC said it was cooperating with several regulatory investigations of foreign exchange trading. The company warned that "ongoing regulatory uncertainty" was weighing on results, and said it had made "customer redress" payments of $428 million during the third quarter.

The company's cost-cutting and earnings improvement were well reflected in its year-to-date numbers. Reported profit before tax for the first three quarters of 2013 was $18.601 billion, increasing from $16.218 billion during the first three quarters of 2012. HSBC's cost efficiency ratio -- essentially the number of pennies of overhead expenses for each dollar of revenue -- was 56.6%, improving from 61.2% a year earlier.

Excluding one-time items, Deutsche Bank analyst Jason Napier estimated HSBC's adjusted profit before tax at $5.842 billion for the third quarter, "about 9% higher than our forecast of $5,341m and we think a similar proportion higher than consensus."

In a note to clients on Monday Napier wrote that "As with other banks this quarter, the majority of the beat came from lower loan impairments. " Napier has a neutral rating on HSBC.


The biggest Wall Street news on Monday was the announcement by Steven A. Cohen's SAC Capital Advisors that it would plead guilty to federal criminal charges of wire fraud and securities fraud, in a conspiracy prosecutors said went on for more than 10 years.

In an agreement subject to court approval, SAC Capital Advisors agreed to $1.8 billion in fines and restitution, less the $616 million the company previously paid to the Securities and Exchange commission as part of a civil settlement.

1 of 2

Select the service that is right for you!

Action Alerts PLUS
Try it NOW

Jim Cramer and Stephanie Link actively manage a real portfolio and reveal their money management tactics while giving advanced notice before every trade.

Product Features:
  • $2.5+ million portfolio
  • Large-cap and dividend focus
  • Intraday trade alerts from Cramer
  • Weekly roundups
TheStreet Quant Ratings
Try it NOW
Only $49.95/yr

Access the tool that DOMINATES the Russell 2000 and the S&P 500.

Product Features:
  • Buy, hold, or sell recommendations for over 4,300 stocks
  • Unlimited research reports on your favorite stocks
  • A custom stock screener
  • Upgrade/downgrade alerts
Stocks Under $10
Try it NOW

David Peltier, uncovers low dollar stocks with extraordinary upside potential that are flying under Wall Street's radar.

Product Features:
  • Model portfolio
  • Stocks trading below $10
  • Intraday trade alerts
  • Weekly roundups
Dividend Stock Advisor
Try it NOW

Jim Cramer's protege, David Peltier, identifies the best of breed dividend stocks that will pay a reliable AND significant income stream.

Product Features:
  • Diversified model portfolio of dividend stocks
  • Alerts when market news affect the portfolio
  • Bi-weekly updates with exact steps to take - BUY, HOLD, SELL
Real Money Pro
Try it NOW

All of Real Money, plus 15 more of Wall Street's sharpest minds delivering actionable trading ideas, a comprehensive look at the market, and fundamental and technical analysis.

Product Features:
  • Real Money + Doug Kass Plus 15 more Wall Street Pros
  • Intraday commentary & news
  • Ultra-actionable trading ideas
Options Profits
Try it NOW

Our options trading pros provide daily market commentary and over 100 monthly option trading ideas and strategies to help you become a well-seasoned trader.

Product Features:
  • 100+ monthly options trading ideas
  • Actionable options commentary & news
  • Real-time trading community
  • Options TV
To begin commenting right away, you can log in below using your Disqus, Facebook, Twitter, OpenID or Yahoo login credentials. Alternatively, you can post a comment as a "guest" just by entering an email address. Your use of the commenting tool is subject to multiple terms of service/use and privacy policies - see here for more details.
Submit an article to us!


DOW 17,804.80 +26.65 0.15%
S&P 500 2,070.65 +9.42 0.46%
NASDAQ 4,765.38 +16.9840 0.36%

Brokerage Partners

Rates from

  • Mortgage
  • Credit Cards
  • Auto

Free Newsletters from TheStreet

My Subscriptions:

After the Bell

Before the Bell

Booyah! Newsletter

Midday Bell

TheStreet Top 10 Stories

Winners & Losers

Register for Newsletters
Top Rated Stocks Top Rated Funds Top Rated ETFs