[ad_1]
HSBC has warned it could start charging for “basic banking services” after reporting a 35% drop in pre-tax earnings during the three months to the end of September.
With interest rates so low, Europe’s largest bank by assets is struggling to charge more for loans than it pays to depositors.
The bank said it is considering charging for products such as checking accounts, which British customers are used to having for free.
CFO Ewen Stevenson told Reuters: “We will have to consider charging for basic banking services in some markets, because a lot of our clients in this environment will lose us money.
HSBC reported earnings before tax of $ 3.1bn (£ 2.4bn) for the third quarter, down from $ 4.8bn (£ 3.7bn) in the same period last year.
The drop was less than expected, and the bank said it expects bad loan losses to be not as bad as forecast and that its main markets will improve.
Asia-focused HSBC said: “This latest guidance, which continues to be subject to a high degree of uncertainty due to COVID-19 and geopolitical tensions, assumes that the likelihood of further significant deterioration in the current economic outlook is low.”
The bank has previously said that it will cut costs and downsize, eliminating 35,000 jobs worldwide, selling its business in France and minimizing its presence in the United States.
It also plans to cut costs to $ 31bn (£ 24bn) by 2022, well below last year’s operating expenses of $ 42.3bn (£ 32bn).
Santander foresees an improvement in profits for the year
Meanwhile, Spanish bank Santander forecast an improvement in core earnings for the year, and CEO Ana Botín said: “Our business recovery is progressing well and the third quarter was significantly stronger than the second.
“Revenues increased 18% in constant euros as activity returned to levels close to the pre-pandemic.”
The bank has forecast underlying profit of around € 5bn (£ 4.5bn) this year, having reported that net profit tripled in the third quarter to € 1.75bn (£ 1.6bn). million) compared to the same period a year ago.
However, in underlying terms, third quarter net profit fell 18% due to coronavirus-related provisions, following a second quarter net loss of 11.1 billion euros (10 billion pounds), also due to amortizations related to the coronavirus.
