HSBC Holdings Plc climbed by the most in three months in London trading after the bank posted a surprise jump in adjusted profit and a regulatory decision boosted its key capital ratio.
Third-quarter adjusted pretax profit, which excludes one-time items, rose 7 percent from a year earlier to $5.59 billion, Europe’s largest bank said in a statement Monday. That surpassed the $5.29 billion average of five analyst estimates compiled by Bloomberg News, as the bank cut costs and loan impairments rose less than expected.
Chief Executive Officer Stuart Gulliver showed progress in his efforts to combat a low growth environment, as revenue rose faster than costs — a measure the bank calls jaws — for the first time in more than a year. In August, the bank abandoned its target of surpassing a 10 percent return on equity by the end of next year amid low interest rates and political uncertainties.
“This is a reasonable quarter, we’ve got that momentum on costs coming through,” Gulliver said in an interview. “People have talked previously about whether we can take our costs down because revenues aren’t growing. You’ll notice we have positive jaws in the quarter and for the full nine months.”
The shares rose 4.9 percent at 10:48 a.m. in London, their biggest intraday gain since Aug. 3.