HSBC Holdings PLC (LSE:HSBA) shares fell 2.6% in Hong Kong and London as the bank reported a decline in profit and revenue in its third quarter.
In the three months to September 30, the FTSE 100-listed lender reported pre-tax profit of US$3.5 bn, down 42% from US$5.40bn a year before.
Noel Quinn, chief executive, said: "We maintained our strong momentum in the third quarter and delivered a good set of results.
“Our strategy produced good organic growth in all three global businesses, and net interest income increased on the back of rising interest rates.”
“We retained a tight grip on costs, despite inflationary pressures, and remain on track to achieve our cost targets for 2022 and 2023."
Net interest income improved to US$8.58bn from US$6.61bn, but net fee income fell to US$2.78 bn from US$3.3 bn.
Net insurance premium income slipped to US$2.66bn from US$2.72bn and revenue decreased by 3.2% to US$11.62bn from US$12.01bn.
The group also said it had put aside $1.1bn to protect itself against potential defaults in the third quarter up from $659m last year.
The banking giant also named Georges Elhedery, a former head of its investment bank, as its new chief financial officer in a surprise move that leaves him in pole position to eventually succeed chief executive Noel Quinn.
AJ Bell financial analyst, Danni Hewson said: “Rising interest rates may be good news for banks but it’s all the other stuff which is causing them headaches right now.”
“Concern about the impact of a slowing economy on bad debts and growth in the loan book is being exacerbated at HSBC by the departure of well-respected finance director Ewen Stevenson and the deteriorating situation in China.”
“This explains HSBC serving up a better-than-expected set of third quarter numbers only to have the market effectively tell it to get stuffed.”
Shares in HSBC fell over 5% in early trading in London to 450.2p and at the same time were down 4.2% in Hong Kong to $40.35.