HSBC (LSE: HSBA) said today its 40% owned Saudi British Bank’s Q3 profit fell almost 20%, double the expected fall, as the bank’s credit policy remained conservative in the current economic environment, while income from associates declined 64.8%, reflecting “the challenging market conditions” experienced this year.
The bank’s net profit for the nine months to 30 September declined 11.4% to US$535 million as earnings per share were down 11.3% at US$0.71, while Q3 profit fell 19.8% to US$152 million.
The bank raised provisions for possible loan losses by US$135 million, which it said reflected its “conservative policy” in the current environment.
Net special commission income rose 8.3% reflecting higher average asset balances and improved margins, while total other operating income was up US$20 million, making for a 5.8% increase as higher foreign exchange and trade-related income offset the lower levels of share brokerage and mutual fund fees.
Customer deposits declined 6.8% year on year to US$23.8 billion, while loans and advances fell 5.7% to US$1.3 billion.
The bank said its capital and liquidity remained strong, as did the overall quality of its loan book.